It has been a long time coming, and yet not done. Jet Airways’ resurrection, which was supposed to be completed last year under a new management team, did not come together as intended due to the fact that there was a to and fro between the Committee of Creditors and the new designated owner about the fact that the conditions precedent for the deal were closed or not.
And while I make it sound simple, per the submissions from both sides, many rounds of discussions happened. Still, the CoC was not convinced that after receiving the Air Operators Certificate, the conditions precedent to the takeover were completed. In the meantime, the Jalan Kalrock Consortium, on the advice of the committee which supervised the affairs of the company in the interim, advised them to hire employees and put them on their own payroll till the transfer of Jet Airways was completed to the Jalan Kalrock Consortium.
NCLT gives approval to transfer Jet Airways to Jalan Kalrock Consortium
The National Company Law Tribunal (NCLT), the court in charge of the bankruptcy proceedings, on January 13, 2023, allowed the consortium of Murari Lal Jalan and Florian Fritsch, the successful resolution plan applicant, to take over Jet Airways India.
The NCLT allowed the consortium to infuse funds into Jet Airways, take over its control and management, and execute all necessary documents to implement the approved resolution plan. And because of all the time lost, they were also granted a reset on the clock, with the “effective date” starting on November 22, 2022, now. Within 180 days of this date, the company has to pay the money and take charge of Jet Airways India Limited, which is the entity under question.
To put things into context, there were five conditions to be met for the takeover by Jalan Kalrock Consortium, or JKC, as they are called now:
- Receive Air Operators Certificate from DGCA
- Get Business Plan approved by DGCA/Ministry of Civil Aviation
- Demerge Airjet Ground Services Limited from Jet Airways
- Receive all existing slots for the restart of operations
- Clearance to operate international flights
Both parties (Banks/lenders and JKC) explained their stance in the submission to the NCLT (read here). In a nutshell, the following is the conclusion if you don’t want to go through the entire submissions:
- No one is disputing the receipt of the Air Operators Certificate (on May 20, 2022)
- The demerger will only happen after JKC is the owner of Jet Airways
- Get Business Plan Approval by the Government of India: There is a deemed approval by GoI in the grant of the AoC to Jet Airways.
- Receive slots for a restart of operations: The NCLT sees that slots have been already allocated to other carriers, and hence, Jet will need to go and acquire slots just like other airlines now. They already have some sanctioned slot pairs.
- International operations will also start in line with current laws where one needs to have at least 20 aircraft to launch international operations.
Bottomline
Jet Airways’ new suitor, Jalan Kalrock Consortium, now has about four months to take control of Jet Airways, and the NCLT has approved of it taking over the entity. The process to move forward will include extinguishing the current shares of Jet Airways, issuing equity to the JKC and handing them over control of the entity in the process. Let’s hope there are no more surprises in the process.
What do you think of the rise of Jet Airways again?
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