Jet Airways' Revival Plan Delayed As Jalan-Kalrock Consortium Seeks More Time To Pay Lenders

The Jalan-Kalrock Consortium (JKC) has informed the National Company Law Tribunal (NCLT) that it requires additional time to repay creditors and implement the resolution plan for the revival of Jet Airways, indicating that the airline's recovery may take longer than expected. Jet Airways, a full-service airline that had been in operation for over 25 years, was grounded on April 17, 2019, due to a severe shortage of funds. The insolvency process began in June 2019, and on June 22, 2021, the NCLT approved a resolution plan submitted by the Jalan-Kalrock Consortium.

The Jalan-Kalrock Consortium is required to pay the first instalment of the loan to the lenders by May 15, which is the following week, in accordance with the NCLT's judgement from January 13 of this year.

However, the consortium has now submitted an application to the tribunal asking that the time between November 16 and April 13 be excluded from the 180-day window for paying the first payment, according to a report in CNBC TV18.

JKC was given 180 days to pay Rs 180 crore to the airline's former creditors and Rs 250 crore to its former employees after the tribunal decided in its favour. Although May 15 is the deadline, the consortium has not yet paid any payments.

The Consortium's resolution plan will go into action on November 16 as determined by the NCLT.
The consortium claimed that the lenders were to blame for the resolution plan's implementation delay in its application to the NCLT.

The first of many actions to implement the resolution plan, according to JKC, was the lenders sharing the airline's bank account information on April 13. 148 days had passed since November 16 as of April 13. The consortium would be unable to inject the monies, according to the statement, without the bank account information.

JKC asserted that it had only one month to implement the plan, which was not practicable nor viable, given that banks took 148 days-out of the allotted 180-to start the resolution process. It is now asking for that time to be excluded.

The consortium has previously attributed the delay to the lenders. The consortium now has an additional 180 days to make the payments after the court had excluded the time between May 20 and November 16, 2022.

According to news reports, the first tranche of payment due to Jet Airways' lenders, employees, operational creditors, and CIRP costs is expected to total Rs 270 crore from JKC.

JKC also has the additional duty of contributing more than Rs 200 crore to the Provident Fund and gratuities for Jet employees in accordance with Supreme Court directives.

The Jalan-Kalrock partnership had suggested a cash infusion of Rs 1,375 crore, including Rs 475 crore for payment to stakeholders, according to the resolution plan.

The remaining Rs 900 crore was to be invested for working capital and capital expenditures. The lenders undertook a significant haircut of Rs 380 crore on their accepted claims of approximately Rs 7,807.7 crore in accordance with the authorised resolution plan.

The third top executive to leave the company in the same week was Sanjiv Kapoor, the CEO-designate of the grounded carrier Jet Airways, who announced his resignation from the company in April. When Kapoor joined Jet Airways in April 2022, everyone anticipated that he would bring the carrier back to its former glory.