Annoyed over the delay in the execution of resolution plan, Jet Airways’ lenders may sell 11 aircraft of the defunct carrier, effectively forcing it into liquidation. Jet Airways’ resolution plan received the National Company Law Tribunal (NCLT) nod around a year and half ago but the Jalan-Kalrock consortium has failed to pay the needed amount.
While the banks approved the resolution plan in October 2020, the NCLT nod came in June 2021. Bankers said that the failure to pay the money has led them to relook their options. “Nobody thought this would take so long to execute. But the fact is banks cannot transfer the company till we receive the money, and the way things are, it seems that the execution of the deal will not happen soon,” said a person privy of the development.
Meanwhile, the 11 planes we have in our possession are also losing value. Maybe the time has come to relook at selling those, the person told Economic Times.
Six expressions of interest (EoIs) were received by the banks for the purchase these planes in August. However, the monitoring committee of Jet Airways, which includes banks and representatives of Jalan-Kalrock, had decided to postpone the process, ET reported last week.
Now that they are witnessing some interest for the planes, some bankers are of the view that lenders have another window to make a recovery, even if a small one. “The Jalan-Kalrock consortium has filed an intervention application in the NCLT, which comes up for watch what they say to the court and act accordingly,” shared a second person.The Jalan-Kalrock consortium has put the blame on the banks for the delay in the execution of the resolution plan and bankers expect the consortium to continue that argument in the next hearing. In addition, they are readying a plan B to close the case even if it means liquidation.
The trust deficit has widened due to no sight of payments despite their agreement to waive two preconditions to facilitate the takeover of Jet Airways, according to the bankers. “Though these were preconditions for the plan implementation, banks had agreed to not oppose it in court if the consortium sought relief. But instead, Jalan-Kalrock has started blaming banks for the delay, which has raised doubts on their intentions,” said the first person cited above.
The State Bank of India-led lenders’ consortium had earlier said it would give a NOC only after the new owners commit to a timeline for implementing the debt resolution plan, which involves a staggered payout. Until this is provided, Jet’s ownership cannot be transferred to the consortium.
