On Tuesday, Jet Airways took a step closer to revival after a bankruptcy court approved the insolvency resolution plan that was submitted by Kalrock Capital and Dubai-based entrepreneur Murari Lal Jalan.
The Mumbai bench of the National Company Law Tribunal (NCLT) led the Jalan-Kalrock consortium to obtain the required approval and licenses to restart the airline within 90 days.
The ministry of civil aviation (MoCA) and the Directorate General of Civil Aviation (DGCA) filed pleas against the approval, however, the court rejected the appeals made by their representing lawyers. Both, the DGCA and MoCA earlier said that the group cannot claim historicity on slots that were held by Jet Airways before its bankruptcy. The airline’s slots were later distributed among other airlines.
Before its grounding in 2019, the carrier that was once India’s largest private airline, held prime slots at major domestic airports, including Delhi and Mumbai.
Ever since the Jalan-Kalrock consortium was declared the winning bidder for Jet Airways, the group has insisted that it has a natural right to the prized slots, without which the chances of Jet Airways’ revival could suffer.
However, the lawyers representing MoCA and DGCA have argued that though the allocation of the airline’s slots to other carriers was temporary, withdrawing those in favour of Jet is not acceptable.
Kapil Kaul, chief executive officer, Indian Subcontinent and the Middle East at aviation consultant CAPA, said: “The NCLT order is a massive cleanup and will allow new promoters to develop a viable business case subject to a significant capitalization.”
The resolution plan submitted by the Jalan-Kalrock consortium in October 2020 was approved by the committee of creditors (CoC). The consortium will invest ₹600 crore in the first two years in a bid to repay creditors and acquire an 89.79% stake in the carrier.
The consortium also proposes to sell existing non-core assets such as realty and luxury cars by the end of the first year and said it will repay ₹131 crore, ₹193 crore, ₹259 crore at the end of the third, fourth, and fifth years, respectively, to financial creditors from the airline’s cash flows.
Overall, it aims to repay ₹1,183 crore to creditors over five years, through collections from asset sale proceeds and cash flows.
The Jet Airways brand will be retained and is expected to resume operations with about 25 aircraft, with a base in New Delhi. Jalan hopes to restart international flights by the end of this year.
