The National Company Law Tribunal’s (NCLT’s) Mumbai bench on Friday allowed the transfer of ownership of Jet Airways to the Jalan-Kalrock Consortium (JKC) eighteen months after it was declared the winning bidder.
Allowing the applications filed by the consortium against the lenders of the beleaguered airline, NCLT agrees that all the conditions precedent provided in the resolution plan submitted earlier have been met. The plan obligates the successful resolution applicant (JKC) to recommence operations at Jet Airways.
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Senior counsel Rohan Rajadhyaksha, appearing for the financial creditors, did seek a suspension of two weeks of the order, but the judges did not allow it.
JKC and the lenders led by the State Bank of India were engaged in an intense stand-off for the past several months. The lenders argued that JKC had failed to meet all the conditions precedent mentioned in the plan, which made it block the transfer of ownership.
The lenders had sought a signed undertaking from JKC which in-effect superseded the resolution plan. JKC had refused to sign the undertaking, which mentioned that consortium shall procure the slot allotment approvals for all airport slots as set out in the resolution plan. The NCLT bench had concurred that restoration of the historical slots was not possible since those were no longer available.
The Jet Airways Cabin Crew Association (JACCA) sought liquidation of the airline for non-payment of dues to the employees.
Rahul Kamerkar, counsel for JACCA, said, “I still have to read the order. But prima facie it does not appear to be the correct order. The SRA has not at all fulfilled the conditions precedent, nor has it made the payments within the timeline in the resolution plan. Both would necessitate a liquidation.”
The NCLT on Monday set November 16, 2022, as the new effective date. The previous effective date was May 20, 2022.
JKC had missed multiple deadlines of putting Jet Airways back on the runway with the last hope being October-end. It got the air operator’s permit in May from the DGCA. Jet 2.0 had committed to start operations with a fleet of six narrow body Boeing B737 aircraft and eventually ramping it up to 111 aircraft in the fifth year.
By 2027, the airline’s fleet was slated to have 86 narrow body planes and 25 wide body planes. The first of the wide bodies were to be inducted in the second year of operations.
The business plan submitted by JKC to the lenders included revenue generation totalling $3.4 billion by the fifth year of operation from passenger and cargo verticals and other revenue streams, documents submitted to the lenders show.