Jet Airways Takeover: Lenders Ask Jalan-Kalrock Consortium To Pay Up
The committee of creditors at Jet Airways had posed questions about the delay in payment.
The Murari Lal Jalan and Kalrock Capital consortium, identified as the winning bidder for beleaguered Jet Airways Ltd., finds itself in the middle of a spat with the airline's lenders.
Two people directly involved with the proceedings, speaking on the condition of anonymity, confirmed that the Jalan-Kalrock consortium is yet to make good on upfront payments, despite winning the bidding process in October 2020.
In multiple meetings, the committee of creditors at Jet Airways had posed questions about the delay in payments, the two people quoted above said. Unless the payments are made, the consortium cannot take full control of the airline, delaying the recovery of one of India's largest aviation brands.
Resolution Plan
The consortium proposed to pay Rs 1,375 crore for the carrier. Out of this, Rs 475 crore will be used to pay stakeholders, and Rs 900 crore will be used as working capital and capital expenditure, according to its resolution plan.
The plan also requires the consortium to pay Rs 185 crore upfront, within 180 days, the deadline for which ends on Nov. 29, the people quoted above said.
Further, the consortium has sought access to cash balances worth Rs 40 crore at Jet Airways so it can start with the revival plans, the two people said.
Creditors have not agreed to this demand since the plan dictates that the consortium can only access this cash balance after taking full control.
If the consortium fails to make the upfront payments by the end of this month, creditors will likely move the courts to disqualify the Jalan-Kalrock consortium as the winning bidder for Jet Airways.
This will effectively force the creditors to either restart the bidding process for the airline or liquidate it, the people quoted above said, adding that the status quo is being maintained.
"All conditions precedent, as outlined in the resolution plan, were completed on May 20, 2022, and the necessary filings in this regard were made before the NCLT on May 21, 2022. JKC has been pursuing the lenders since May 21, 2022, through multiple written communications to initiate the process to enable JKC's fund infusion in Jet Airways and implement the plan," a spokesperson for the Jalan-Kalrock consortium said.
The spokesperson for the consortium said that it has already deposited Rs 150 crore with lenders.
"There is no delay from the consortium to implement the resolution plan, and we confirm that the JKC is in full compliance with the approved plan, and it remains deeply committed to the relaunch of Jet Airways and to recapture the lost glory," the spokesperson said.
When asked if the consortium has sought access to the cash balances at Jet Airways, the spokesperson said that: "Cash balances at Jet Airways are already being used for expenses on account of Jet Airways. This is not something that JKC has 'sought' for."
According to a third person, who also spoke on condition of anonymity, the resolution plan does not authorise the lenders to speak on fulfilment of conditions precedent, but the lenders are using their current position and authority over Jet Airways to renegotiate the plan.
The Jalan-Kalrock consortium has approached the NCLT to direct bankers to proceed with the implementation of the resolution plan, the third person quoted above said.
Jet Airways was grounded in April 2019 after a series of mishaps that eventually led to insolvency proceedings in June of that year. After multiple rounds of bidding, the Jalan-Kalrock consortium was finalised as the winning bidder. Neither partner has any previous experience running an aviation firm.
Jet Airways' financial creditors had admitted claims worth Rs 7,453 crore, while its operational creditors had dues worth Rs 6,658 crore, according to the last available data.
