The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the resolution plan submitted by a consortium of UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan, with some riders.
The two-judge bench presided by Janab Mohammed Ajmal and V Nallasenapathy approved the Kalrock-Jalan resolution plan but said Jet Airways would have no historic rights over landing slots.
In a verbal order pronounced this afternoon, the court said the allotment of slots would be decided by the appropriate authority, which in this case would be the Director-General of Civil Aviation (DGCA) and the ministry of civil aviation (MoCA). The court has given the government 90 days’ time for the same. The Kalrock-Jalan had claimed historicity to get all the slots of the airline back, which have now been allotted to other airlines like Indigo, SpiceJet, GoAir, etc over the two years that Jet has remained grounded.
A landing slot is simply the permission of the airport operator for an airline to land a plane (and then take off). This gives the airline the right to land the aircraft, as well as to use all necessary airport services and infrastructure.
While the court laid out a specific 90-day timeline for Jet Airways to get all these necessary approvals, it also said it would consider granting an extension as required if there is an unforeseen delay. At the same time, the NCLT bench also directed the government to ensure that the airline's resolution plan is not frustrated because of obduracy. The fine print of the NCLT order is awaited.
In a statement, Kalrock-Jalan Consortium, said, "The consortium awaits the written order by the National Company Law Tribunal approving the Resolution Plan and shall inform all stakeholders on next steps for the revival of their beloved airline – Jet Airways. The Consortium takes this opportunity to thank all the stakeholders who supported the Consortium in this long journey until now and the Consortium seeks their continued support and encouragement on the way forward."
"The consortium maintains its stand that it wants to work alongside the ministry of civil aviation, the Directorate General of Civil Aviation, and all its competitors to put Jet Airways back in the skies. The journey until now has been extremely challenging yet satisfying and this would not have been possible without the continued support of the Committee of Creditors of Jet Airways, the Resolution Professional for Jet Airways, all the Advisors and Consultants of the Consortium, and the millions of Jet Airways well-wishers and loyal customers across the Globe, who stood by us throughout the process. We are overwhelmed by the support. Our team will study the written order once issued by the Hon’ble National Company Law Tribunal and we will provide a detailed response on the next steps subsequently," it added.
Speaking to CNBC-TV18 after the verdict was pronounced, the insolvency resolution professional of the airline, Ashish Chhawchharia said, "I am quite pleased that the bench has approved the plan...and we thank for bench for that. As far as the slots are concerned, my understanding is- and of course, we have to see when the actual order comes out, but my understanding is they (NCLT) have requested and directed the government to co-operate because without slots the airline cannot operate. They have not allowed the historicity which is one of the contentions of the RA (resolution applicant, ie Kalrock-Jalan consortium) was, and also from our side. But they have also given a very time-bound order saying that within 90 days the authorities are expected to work along with the resolution applicant."
When asked if he expects the airline to get the required slots from DGCA, MoCA, Chhawchharia said, "Let me tell you we have already been working on that, it's not like we were waiting for the order. The authorities have been very cooperative. We have had various discussions with the ministry officials and various airports. Now moving towards closure with this 90-day timeline will put some more tailwind behind this as everyone is now working with a target. In most of the airports in the country- there are no constraints on the slots. It is only the level-three airports – like the Mumbai, Delhi airports- where there are presently some constraints we understand. Capacities have been increased in New Delhi, new runways coming up... Navi Mumbai airport will also be underway soon. So there should be more capacity and why should the airports not welcome Jet Airways back. The only question is the timing."
Separately, the court also rejected Sahara Group's plea objecting to the sale of Jet Airways' Bandra Kurla Complex property in Mumbai. Jet Airways, India’s oldest and once largest private airline, was grounded in April 2019 after a severe scarcity of funds, following which an SBI-led consortium referred it to the NCLT for resolution under the insolvency and bankruptcy code.
After several rounds of bidding, the lenders of Jet Airways finally zeroed in on the Kalrock-Jalan consortium in October of 2020. Kalrock Capital is a UK-based asset management company and Murari Lal Jalan is a little-known entrepreneur based in the UAE. Neither has any prior experience in the aviation sector.
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The Kalrock-Jalan consortium is understood to have offered Rs 1,183 crore of repayment over a period of five years to the financial creditors, employees, and workmen of Jet Airways. It has also offered about a 9.5 percent stake in Jet Airways, and a 7.5 percent stake in Jet Privilege to the financial creditors, it is understood. The airline is facing claims of over Rs 15,525 crore from various creditors under IBC, while the 13 domestic banks and financial institutions led by SBI have alone made claims of Rs 5,776 crore. SBI, Yes Bank, PNB, IDBI Bank, Canara Bank among key lenders to Jet Airways.
In an interview with CNBC-TV18 earlier, Murari Lal Jalan had claimed that the consortium intends to get Jet back in the skies within four to six months of getting the approval from NCLT. He also claimed that the ministry of civil aviation had assured the bidders that slots would be made available for Jet Airways when it resumes operations. However, there is still no clarity on this front.
"The understanding of the RA (Kalrock-Jalan consortium) was that under historicity, all these slots which were used and available with Jet should be available. But if that has not happened, I don’t think it is something to be utterly dismayed about. We will work with RA, airport authorities to get some amicable solution," Ashish Chhawchharia told CNBC-TV18.
Jet has an existing fleet of 11 aircraft comprising of B777, B737, and A330s. As per the resolution plan approved by lenders, the Kalrock-Jalan consortium has proposed to take the fleet size to 120 within five years, and have a mix of domestic, international, and cargo operations.
First Published: IST