Jet Airways has run into turbulence again, the Jalan-Kalrock consortium has failed to pay the outstanding amount to the landers forcing the lenders to re-evaluate their options. As per the sources, no one anticipated that the resolution would take so long to execute. It has been almost a year and a half since the National Company Law Tribunal (NCLT) approved the Jet Air resolution plan.
According to the resolution plan by the Jalan-Kalrock consortium, the group planned an infusion of INR 13.75bn. This included INR 9 million towards capital expenditure and approximately INR 4 million to clear creditor’s claims, like lenders, employees etc.
Banks approved Jet Airways’ resolution plan in October 2020. It was then approved by the NCLT in June 2021.
Meanwhile, the banks cannot transfer the company until the money is received, and experts feel that the execution will not happen soon. Going ahead the 11 planes are losing value and banks are considering selling the aircraft to recover costs, as per a report by Moneycontrol.
A process in August got six expressions of interest (EoIs) from banks for the purchase of these planes. The interest has made some bankers believe they can make a recovery, albeit small.
As per some sources, the Jalan-Kalrock consortium has filed an intervention application in the NCLT, which comes up for hearing on November 29. Banks will watch what they say to the court and act accordingly.
Going ahead, Jet Airways has decided to restructure the salaries of certain employees to secure cash flows. Sources close to the airline have claimed that a section of Jet’s total workforce comprising 230-250 employees will see their pay cut by up to 50%, and some will be placed on leave without pay until further notice from December 1, 2022.
As tensions between the lenders and consortium continue to escalate further, it is uncertain whether the airline plans to clear the pending provident fund and gratuity dues of staff.