Creditors have told India's National Company Law Tribunal (NCLT) that Jet Airways (Mumbai International) should be wound up, saying the tribunal-approved resolution plan is unworkable.
Counsel for the State Bank of India-led committee of creditors told a July 10 NCLT hearing that the Jalan Kalrock Consortium (JKC) had failed to inject any of the promised capital into the airline and the committee's members were instead putting money into the airline. The lawyers said that if creditors were to see any of their promised monies, Jet Airways would need to be wound up.
With the backing of the committee of creditors, the NCLT approved JKC taking over the grounded airline in mid-2021, subject to the consortium making an agreed series of payments to creditors and pumping capital into the airline. When Jet Airways collapsed in April 2019, it owed almost INR80 billion rupees (USD972.3 million) to creditors. However, since the 2021 approval, creditors have launched a series of challenges against the resolution plan at the NCLT and other legal forums.
This week, counsel for the creditors criticised the series of extensions granted to the consortium to make good on its promised payments and said that in addition to the amounts originally owed, the creditors had spent another INR4.7 billion (USD57.1 million) since the resolution process began and continue to spend INR230 million (USD2.8 million) each month on expenses. At least one employees' union, representing out-of-pocket staff not paid promised monies, supported the creditors once again challenging the resolution plan.
In November 2022, in a significant legal win for JKC, the NCLT set a new effective date of ownership, giving the consortium another six-month grace period to start paying creditors the agreed INR4.75 billion (USD57.7 million) owed to them per the resolution plan. The creditor's committee immediately challenged that decision but lost. Unfortunately for the creditors, the appellate tribunal also excluded the time from the initial appeal filing to the mid-March 2023 ruling, giving the consortium even more time to start making payments.
"JKC shall not do anything or has done which is contrary to the NCLT approved resolution plan and is fully committed to reviving Jet Airways,” the consortium told the MoneyControl outlet this week. It says the resolution plan "provides for fund infusion to start only after the effective date, and due to the challenges made on the effective date, there have been delays in implementing the resolution plan... JKC is required to infuse funds into the company only after the effective date declared and agreed upon."
The NCLT will resume hearing the creditors' application later this month and has asked JKC to respond to the claims made this week. The consortium told MoneyControl that it aims to start scheduled operations within three to four months of taking control of Jet Airways from the creditors.
