Lenders seek stay on Jet’s transfer to Jalan-Kalrock Consortium

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Lenders to have filed an appeal with the appellate bankruptcy court, seeking a stay on an order of the National Company Law Tribunal (NCLT) that allowed the transfer of the airline’s ownership to the Jalan-Kalrock Consortium (JKC) that had won a bid for the bankrupt company, two people aware of the development told ET.

The NCLT had approved the transfer of Jet Airways’ ownership on January 13, despite the lenders’ contention that the consortium had not fulfilled all condition precedents (CPs) – including securing the airline’s domestic flight slots and international traffic rights – as proposed in the resolution plan.

Ashish Chhawachharia, the Grant Thornton-backed resolution professional for Jet Airways, did not respond to ET’s request for comment. In its order, the NCLT gave the winning bidder time till May 2023 to clear the dues of lenders, trader creditors and employees.

On Monday (January 23), lenders approached the NCLAT, claiming that the winning bidder had not met certain condition precedents, one of the people said.

According to a senior banker, the resolution plan cannot be implemented till the Directorate General of Civil Aviation grants approval for parking slots and the purchase of aircraft. “If this approval does not come now, we don’t see how the company will start operations. Secondly, a majority of the payment to lenders is deferred. The company will pay the upfront amount, but they may not have adequate cash flows to pay the deferred amount if the operations do not start when we transfer the company to the winning bidder,” said the banker.

According to the January 13 NCLT order, at various joint lender meetings, monitoring committee lenders had refused to acknowledge the fulfilment of condition precedents (CPs) by the winning bidder. However, The NCLAT’s order on October 21, 2022, had held that the winning bidder complied with all the necessary CPs to the satisfaction of the lenders, the NCLT order noted. “The other dispute is about the distribution of ₹120 crore proceeds that the company has as a cash balance. This money is on account of rentals for parking slots that Air Serbia paid to Jet Airways since it shut operations,” said the person cited earlier.

The resolution plan is silent on the dispute, and banks and JKC have claimed that money. In the past, the lender had threatened to liquidate Jet Airways if the rentals were not distributed to them, as reported by ET on July 22, 2022.Lenders have approached the NCLAT at a time when the winning bidder is involved in a separate legal battle involving a ₹250-crore payment to former employees of Jet Airways.



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