NCLT Allows Kalrock-Jalan Consortium To Take Control Of Jet Airways

The National Company Law Tribunal (NCLT) on Friday allowed the application of the Kalrock-Jalan consortium to implement its resolution plan for Jet Airways and infuse funds into the grounded airline to revive it. The tribunal also granted the consortium

180 days beyond November 16 to pay dues to the creditors and employees.

This effectively means that the consortium can take over the reins of the airline. However, it could face a legal challenge as the lenders are likely to appeal against the order, according to industry sources.

Advocate Rohan Rajadhyaksha, who appeared for the lenders, sought a two-week stay on the implementation of the order, but the tribunal declined the plea.

The consortium welcomed the NCLT order on the transfer of ownership. “We await the detailed judgment…We look forward to bringing the joy back to the skies,” it said.

Jet Airways shut operations in April 2019 due to a financial crisis. The airline then underwent a resolution process under the Insolvency and Bankruptcy Code. The revival plan submitted by the consortium was cleared by Jet’s committee of creditors in October 2020. The NCLT approved the plan in June 2021.

According to the plan, the consortium was supposed to fulfil five condition precedents before it became effective.

In October 2022, the consortium moved the tribunal, seeking its confirmation for the fulfilment of the five conditions — the validation of air operator certificate, submission of business plan, slot allotment approval, international traffic rights clearance in compliance with law, and demerger of ground-handling business.

The lenders, however, opposed the application, stating that the conditions precedent were not fulfilled, and opposed the transfer of control. An appellate tribunal order last October on the payment of over Rs 200 crore in gratuity and provident fund to the airline's former employees has been a bone of contention between the two sides. The issue is now before the Supreme Court.

While the appellate tribunal order put the liability on the consortium, the revival plan approved over a year ago caps the total payout it will make to the creditors.

According to the revival plan, the consortium proposed a total infusion of Rs 1,375 crore, including Rs 900 crore towards capex and working capital and Rs 475 crore to settle claims of the creditors. The approved plan has a clause that states that the amount infused by the consortium for settlement of claims of all stakeholders would be limited to Rs 475 crore.