With the Jalan-Kalrock consortium resolution strapped firmly in place, Jet Airways is a step closer to getting airborne. The new promoter of the carrier has agreed to the demands made by banks for infusion of capital, thereby clearing the decks for the airline’s smooth lift-off.
At a meeting held last week, lenders asked the Jet Airways management to bring in capital before restarting operations.
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“They agreed to bring in capital,” said a banker. Jet Airways declined to comment when contacted.
The first tranche of capital may come within a week. Two years ago, the consortium of Murari Lal Jalan and Kalrock Capital won the bid for Jet Airways, which was grounded in April 2019.
The implementation of the resolution plan approved by the National Company Law Tribunal (NCLT) was stuck due to ambiguity, said bankers. The new promoter wanted to use the cash balance with banks to pay up dues, clearly not keen on bringing in fresh capital.
“All banks have discussed several issues with the new promoter. There were some disputes regarding the cash balance the banks had in the current account, apart from compliance with certain conditions,” said a senior official from a public sector bank.
“We are, however, positive after the recent rounds of talks. Earlier the consortium did not agree to bring in any money. It wanted the funds lying in the current account for clearing dues. There was ambiguity surrounding the treatment of those funds,” added the official.
According to people in the know, the first tranche of additional payment to banks by the consortium is expected to be made in a week’s time. The decision was taken at the joint lenders’ meeting on September 30.
The consortium had 270 days to fulfil all criteria required for the plan’s implementation. The deadline for this expired in March this year.
In April, banks had offered conditional support to the Jalan-Kalrock consortium’s plea for an extra two months to fulfil conditions required for the implementation of Jet Airways’ revival plan.
Lenders had consented to the extension plea on the condition that the consortium bear the cost of meeting the expenses of the airline. These included paying airport charges, aircraft parking charges, salary, and insurance during the additional period. The consortium would also fund all expenses required for the re-certification process.
Last June, the NCLT cleared the consortium’s resolution plan to revive the grounded airline. According to the plan, the consortium agreed to Rs 475 crore to the grounded airline’s lenders, employees, and other creditors.
- Apr 2019: Jet Airways grounded following financial woes
- Jun: NCLT admits Jet Airways for bankruptcy proceedings
- Jun 2021: Tribunal clears Jalan-Kalrock consortium’s resolution plan
- Mar 2022: Deadline for implementing the resolution plan extended
- May: Airline gets DGCA nod for starting commercial flights