NCLT Okays Transfer Of Jets Ownership To Jalan-Kalrock

The effective date of the resolution plan has been set as 16 November. As a result, the consortium will get 180 days from the said date to make payments to lenders.

The lawyer representing the lenders sought a two-week stay on the ruling, but was declined. The lenders now have the option of appealing the order, a person familiar with the development said, requesting anonymity.

In its written order, NCLT noted that NCLAT, the appellate tribunal, in an October order already held that the consortium has met all necessary conditions for ownership transfer to the satisfaction of the monitoring committee. On international traffic rights, another core issue between lenders and the consortium, NCLT said that international traffic clearance can only be obtained from civil aviation regulator Directorate General of Civil Aviation (DGCA) after Jet Airways has 20 aircraft in operation, which can only be achieved once the operation is re-commenced successfully.

So far, the Jalan-Kalrock consortium has deposited bank guarantees worth ₹150 crore with the lenders. According to the resolution plan, the consortium has to make cash payments of ₹185 crore to financial creditors within six months from the effective date.

“The consortium is now free to sell assets of Jet Airways. These include five Boeing 777s, three Boeing 737s and three Airbus A330s and aircraft engines. The consortium will have time till mid-May to make payments to creditors, including workmen and employees," the person said, seeking anonymity.

The airline has one leased Boeing 737-800 NG aircraft, which it used to operate test flights to obtain the air operator certificate from DGCA. As of date, the airline has more than 200 employees.

“NCLT has ordered the transfer of ownership of Jet Airways to Jalan-Kalrock consortium in compliance with the resolution plan, and we await detailed judgement that follows this order to -provide further details," the Jalan-Kalrock consortium said in a statement.

While NCLT has approved the transfer of ownership, a consensus is yet to emerge between the lenders and the Jalan-Kalrock team over the rental income of an Airbus A330 leased to Air Serbia and the payment of pending provident fund and gratuity dues to the airline staff, a second person said, also declining to be named.

“Hope they admit and accept the claims approved by NCLAT on the gratuity and gracefully pay the legitimate dues and not claim amnesty that this was not a pre-approved plan lest more legal hurdles emerge," said Narayan Hariharan, a former senior vice-president of Jet Airways. The pending provident fund and gratuity dues amount to around ₹250 crore.

Jet Airways leased the Airbus A330 to Etihad Airways, which later subleased it to Air Serbia. The rental income from this aircraft has become one of the key points of contention between both parties, with the lenders offering the view that the distribution of the rental income should be among financial creditors, whereas the winning bidder has argued that this instead should cater to the working capital of the airline, the second person said. The rental income for this aircraft stood at ₹180 crore between January 2021 and August 2022, amounting to over ₹6 crore per month.

The consortium had also proposed a total cash infusion of ₹1,375 crore, including ₹475 crore for payment to stakeholders from this. The remaining ₹900 crore was to be infused for capital expenditure and working capital requirements. At ₹380 crore, the lenders took a steep haircut on their admitted claims of over ₹7,807.7 crore under the approved resolution plan.

On 22 June 2021, the tribunal approved the resolution plan submitted by the Jalan-Kalrock consortium subject to necessary approvals. The consortium comprises Dubai-based non-resident Indian Murari Lal Jalan, who will hold shares in Jet Airways in his personal capacity, and Florian Fritsch, who will hold shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.

Jet’s relaunch has been a much-anticipated event ever since it received the air operator certificate in May.