Lenders to Jet Airways are growing increasingly impatient with the holdup in implementing the resolution plan and are considering selling 11 of the defunct airline’s planes, effectively forcing the airline into liquidation.
Bankers claim they have had to reconsider their options because the Jalan-Kalrock consortium has not made the needed payment even 1.5 years after the National Company Law Tribunal (NCLT) authorised the settlement plan.
“Nobody imagined this would take so long to implement. However, banks cannot transfer the firm until we receive the funds, and given the current state of affairs, it appears that the purchase will not be executed anytime soon. The 11 aircraft we now own are likewise depreciating in value. Perhaps it’s time to reconsider selling those.”
Prior to the NCLT’s approval in June 2021, the banks had already accepted the resolution plan in October 2020.
In a process that was finished in August, banks have received six expressions of interest (EoIs) to purchase these aircraft. The Jet Airways monitoring committee—which is composed of banks and Jalan-Kalrock representatives—had agreed to put the procedure on hold.
Some bankers claim that now that there has been some interest in the planes, banks have another opportunity to make a recovery, even if it is just slight.
“A hearing for the Jalan-Kalrock consortium’s intervention application at the NCLT is scheduled for November 29. Banks will be careful with what they say in court and take appropriate action.”a second person with knowledge of the incident said
The consortium has thus far blamed banks in their court filings for the delay. Bankers are putting up a plan B to wrap up the litigation even if it means liquidation because they anticipate the consortium to reiterate that point at the next hearing.
Bankers claimed that despite their agreement to remove two preconditions to assist the takeover of the airline, there has been no sign of payments, increasing the trust deficit.
“Despite the fact that these were requirements for the plan’s execution, banks had agreed not to challenge it in court if the consortium requested relief. Jalan-Kalrock, however, has started blaming banks for the delay, casting suspicion on their motivations.”
Jet Airways CEO clarifies about Unpaid Leaves
The CEO of Jet Airways, Sanjiv Kapoor, tweeted that a report claiming that senior management and 60% of existing staff had been placed on unpaid leave for three months was “100% incorrect information.”
He clarified the situation by stating that no staff are being dismissed in a subsequent tweet.
To clear the air (as many numbers and%s flying around), wrote Kapoor. 1. Only one-third of the staff will be affected; 2. Of the remaining one-third, most will have their pay reduced for temporary positions. 3. Less than 10% of the total will be on temporary LWP. 4. Nobody was let go.
“These are all fine people who have been working hard to try to do what has never been done: resuscitate an airline that has gone bankrupt,” said Kapoor in further clarification. However, certain temporary tough decisions had to be made because the ownership transfer timeframe was sliding owing to events outside of our control.
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