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Revival of Jet Airways hits yet another roadblock

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The revival of Jet Airways hits yet another air-pocket with the Jalan-Kalrock consortium telling the National Company Law Appellate Tribunal (NCLAT) about its inability to pay additional money to clear provident fund and gratuity dues of around ₹250 crore to employees.

The NCLAT, in its October 21 order, had directed the consortium to clear unpaid PF and gratuity to workmen and employees of the airline until June 2019 when the insolvency process was initiated. Jet was grounded in April 2019, post which it was dragged to the NCLT by the lenders.

businessline had reported, quoting sources, that the consortium was not willing to make any additional payment above the amount approved in its resolution plan. According to sources, this was conveyed to the lenders in a recent meeting.

Resolution plan

After two years, the NCLT had approved Jalan-Kalrock Consortium’s resolution plan. Per the revival plan, the consortium proposed a total infusion of ₹1,375 crore. This includes ₹900 crore towards capex and working capital and ₹475 crore to settle claims of all creditors. The ₹475 crore includes ₹380 crore to be paid to lenders, ₹52 crore to employees and workmen, and the remaining towards other operational creditors.

However, according to a report, the lenders have raised concerns over the disbursement of these funds. In response to this, a spokesperson of the Jalan-Kalrock consortium said, “It has informed the lenders on multiple occasions that they are ready with their funds for infusion. The Consortium has already deposited ₹150 crore with lenders.” Further, it said it is prepared to make payments of ₹52 crore, per the plan.

The Jalan-Kalrock Consortium has also filed another application in the National Company Law Tribunal (NCLT) on Tuesday against its lenders to seek control of the airline.

It said that all conditions precedent for the resolution plan were completed on May 20, 2022, and necessary filings were made before the NCLT on May 21.

Since then, it has been “chasing lenders” through multiple written communication to infuse funds in Jet Airways and implement the plan. On Tuesday, the NCLT granted the lenders two weeks time to respond. The matter will be heard on November 29.

“There is no delay from the Consortium to implement the resolution plan, and we confirm that the JKC is in full compliance of the approved plan, and it remains deeply committed to the re-launch of Jet Airways and to re-capture the lost glory,” the Consortium said in a statement.

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Published on November 16, 2022

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