The National Company Law Tribunal (NCLT) on Friday approved the transfer of ownership of bankrupt-Jet Airways to the Jalan Kalrock consortium and gave the winning bidder more time to pay the dues to the creditors. The latest rulings have come on two petitions filed by the consortium. One plea pertained to approval of transfer of ownership and the second one related to extension of time for the payment of dues to the creditors. Earlier, the tribunal had given time till November 16, 2022 for the consortium to make the payments to the creditors of the airline.
Resolution professional, Ashish Chhawchharia, had informed the bankruptcy tribunal that two new investors had shown early interest for investing in Jet. One of them is a foreign investor from West Asia and the other is an Indian-entity-backed by a UK investor.
Jet is facing insolvency proceedings in the Netherlands as well where it was declared bankrupt after it failed to pay two European creditors.
While the interest from Hinduja is a positive sign for the grounded airline, executives of banks cautioned that there is no certainty that the deal will fructify. The cost of recapitalising Jet Airways is increasing every day.
The airline had been delaying the salaries of its pilots, engineers and senior staff since August who have not been paid since January.
The pilots are also looking to take recourse to legal steps, including recovery proceedings against the company for salary, allowances and benefits
The possible date for bidders to submit a resolution plan to the adjudicating authority -- National Company Law Tribunal (NCLT) -- is September 27.
Jet Airways, which is yet to resume operations under its new owner, will reduce salaries for various staff and send many employees on leave without pay, amid uncertainty over resumption of its operations. The measures, which will be effective from December 1, were revealed hours after the winning bidder Jalan-Kalrock Consortium (JKC) said it might take "difficult" near-term decisions to manage cashflows. The once-storied airline shuttered operations in April 2019 and JKC's resolution plan was approved under the insolvency process by the National Company Law Tribunal (NCLT) in June last year.
The summer schedule of flights of all other domestic airlines such as Vistara, IndiGo, Air India and GoAir have been approved till October 26.
In a series of tweets reacting to banks led by State Bank of India taking over management control of troubled Jet Airways, Mallya said, "...Only wish the same was done for Kingfisher".
Alleging some "motives" behind the series of developments at the carrier, Jet Airways Officers & Staff Association president Kiran Pawaskar demanded a probe, preferably by CBI.
A SpiceJet official allegedly told some Jet pilots that they were doing a "charity" by hiring them.
Jet's operating fleet reduced from 103 planes in October 2018 to 35 now, leading to massive cancellations and a surge in airfares
Jet Airways owes more than Rs 8,000 crore to a consortium of banks led by the State Bank of India, which now run the airline, while it has a much larger debt pile by way of accumulated losses to the tune of Rs 13,000 crore and vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore.
The full service carrier has more than 20,000 employees, including pilots and engineers.
Darwin Group has offered Rs 14,000-crore deal to the lenders for acquiring the grounded airline
Stock exchanges will impose restrictions on trading in Jet Airways shares from June 28 as part of preventive surveillance measures to curb excessive volatility.
SBI chairman Rajnish Kumar said Naresh Goyal would be eligible to bid for the airline when the lenders auction it next month.
He urged employees to bear with him in this difficult situation a little longer, till the airline emerges out of turbulence and fiscal challenges.
Jet's staff strength stands whittled down to around 4,000, with many former employees having joined airlines in India and abroad.
Serious Fraud Investigation Office will probe the airline for instances of fund diversions and large-scale irregularities.
The decision to allot vacant slot to other carriers has been taken to reduce the inconvenience of passengers and facilitate induction of additional capacity.
The money is expected to be disbursed by the lenders consortium led by SBI after the Jet management submits an operational plan on how it intends to use the money till May 7.
Among executives who have been approached are former president and CEO of IndiGo Aditya Ghosh, Wolfgang Prock Schauer, current president and Chief Operating Officer at IndiGo and Sanjay Kumar, Chief Strategy and Revenue Officer of IndiGo.
Independent directors were supposed to safeguard the interest of all stakeholders.
However, the tribunal rejected the plea by the Netherlands based vendors for filing an intervention application, saying the Dutch district court had no jurisdiction to order bankruptcy of Jet Airways.
Jet has come under regulatory scrutiny twice this year.
The airline owes lakhs of rupees to passengers and its vendors.
With substantial number of employees having been with Jet Airways for around 20 years, getting another job is also not easy considering the age factor and the job market situation.
The guild, which claims to represent around 1,100 of the 1,600 Jet pilots, had earlier warned to go on strike from April 1, unless their salary dues were cleared and clarity was provided on future payments by March 31.
The winning bid attracted over 99 per cent votes, with lenders overwhelmingly voting for a revival instead of recovery through liquidation.
The top executives who have put in their papers with immediate effect include Jet's chief executive officer (CEO) Vinay Dube, chief finance officer (CFO) and deputy CEO Amit Agarwal and company secretary Kuldeep Sharma.
'Now we will have real employees as the owner of the airline.'
Additionally, promoter Naresh Goyal and Etihad Airways, which owns a 24 per cent stake in the airline, will infuse around Rs 2,000 crore into the airline, sources aware of the development said.
'I hope they all survive, but it is a tough world.' 'The carriers who are already established are already struggling.'
Jason Unsworth is the founder and CEO of Atmosphere Intercontinental Airlines, which would establish a new premium airline group in four different countries.
While Jet founder Naresh Goyal said he was willing to infuse Rs 700 crore and also pledge all his shares in the company provided he can have at least 25 per cent stake, the airline's foreign partner Etihad Airways insists he must not keep more than a 22 per cent stake.
After due deliberations, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received.
AIBEA has decided to write to the government and RBI against infusing money into Jet Airways. State-owned banks, including SBI and PNB, are the main lenders to Jet.
Over the past several months, the airline has struggled to pay vendors and staff salaries on time.
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