The National Company Law Appellate Tribunal (NCLAT) on Tuesday 12th March 2024 upheld the resolution plan for the beleaguered carrier Jet Airways, greenlighting the transfer of its ownership to the Jalan Kalrock Consortium. This decision comes after a prolonged legal battle between the lenders and consortium marking a crucial step towards the revival of the grounded airline.
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Directions of NCLAT
The appellate tribunal has now directed the Airlines’ Monitoring Committee to ensure the completion of the ownership transfer within 90 days. Additionally, the tribunal has instructed the lenders to adjust the INR 150 Cr performance bank guarantee paid by the consortium.
The resolution plan, embroiled in legal complexities for over a year, saw the lenders previously appealing to the Supreme Court for intervention. However, the Supreme Court deferred the matter to the NCLAT, culminating in this latest decision.
SBI Led lenders to create security on Immov. Property within 30 days
The Managing Committee led by SBI and other lenders has been tasked with creating security on immovable properties offered by the successful resolution applicant, Jalan Kalrock Consortium within 30 days. Subsequently, upon the creation of such security, the lenders are mandated to adjust the performance bank guarantee towards payment from the consortium.
Within the same timeline, the lenders are further obligated to issue shares of Jet Airways to the consortium and hand over control of the company. Following the handover, both the consortium and lenders are required to fulfil all payments to creditors by the resolution plan approved by the tribunal.
Jet Airways, which has been grounded since April 2019 due to severe financial challenges expressed its satisfaction with the NCLAT’s decision. In a statement, the airline highlighted that the resolution plan would be implemented without deviations, paving the way for its relaunch.
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Financial Commitment of Kalrock Consortium
In September last year, Jalan Kalrock Consortium infused INR 100 Cr into Jet Airways fulfilling its total financial commitment of INR 350 Cr equity as per the court-approved resolution plan. Now the consortium I poised to take control with all other commitments met.
Once upon a time, the Airline used to be a leading player in the aviation industry and now aims to recommence operations in 2024, subject to regulatory approvals. Its journey from insolvency to resolution underscores the complexities of the aviation sector, particularly amidst the backdrop of the COVID-19 pandemic.
Following the resolution of its insolvency proceedings, Jet Airways looks forward to a new chapter under the stewardship of the Jalan Kalrock Consortium, signalling hope for its employees, stakeholders, and the aviation industry at large.
