NCLT approves Jalan Kalrock ownership of Jet Airways

The National Company Law Tribunal (NCLT) on Friday allowed the ownership of Jet Airways to be transferred to the Jalan Kalrock Consortium (JKC), which had won the bid to resurrect the grounded carrier in 2021. This comes as the consortium has appealed to the Supreme Court against a separate ruling by the National Company Law Appellate Tribunal (NCLAT) directing it to clear unpaid provident fund dues of Rs 250 crore to employees, said multiple people aware of the development, highlighting the legal hurdles that remain for the new owners.

An NCLT division bench of justice PN Deshmukh and technical member Shyam Babu Gautam allowed JKC’s seeking transfer of Jet’s ownership in an oral order on Friday. The ownership currently vests with the monitoring committee comprising Jet’s lenders, JKC executives and the court-appointed resolution professional.
The court gave its approval despite lenders’ contention that JKC had not fulfilled all conditions–including securing Jet’s domestic flight slots and international traffic rights—as per the resolution plan, which is effective November 18.

The resolution applicant usually has 180 days to clear all dues to creditors but the NCLT has acceded to JKC’s demand that this be extended. It has until May 2023 to clear all dues to lenders, other creditors and workers.

The NCLT rejected an oral demand by the lenders to stay operation of the Friday order for two weeks so that they can challenge the ruling in the NCLAT.

JKC has said it will spend Rs 1,375 crore–Rs 900 crore as capital infusion and Rs 475 crore paid to creditors. Of that, Rs 380 crore will go to financial creditors. JKC is to have an 89.79% stake while 9.5% will go to lenders.

“The NCLT order implies that the airline’s handover and distribution are segregated,” the person said. “The standoff between lenders and the resolution applicant on payment of uncleared dues to employees delayed the handover of the airline.”

Naresh Goyal-founded Jet Airways, once India’s biggest private carrier, stopped operations on April 17, 2019, unable to cope with its financial liabilities. It was taken to bankruptcy court by the airline’s lenders. JKC’s plan was approved by the NCLT in June 2021. Since November 2022, there has been a tussle between lenders and JKC over unpaid dues.


Business Asia
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