Reviving Jet Airways: Jalan Kalrock Consortium completes Rs 350 crore payment; plans to start airline in 2024

The National Company Law Appellate Tribunal (NCLAT), on August 28, granted an extension of time to the Jalan Kalrock Consortium, which is the successful resolution applicant for Jet Airways

Jalan Kalrock Consortium (JKC), the successful resolution applicant of Jet Airways, has completed the additional infusion of Rs 100 crores to revive the now-defunct carrier.

With this infusion, JKC has fulfilled its total financial commitment of Rs 350 crore ($42.1 million) equity as per the court-approved resolution plan, and all commitments by JKC now stand fulfilled to take control of the iconic airline, the press statement issued by the airlines said.

"The consortium’s strategy to revive the airline remains unaltered. The new promoters are determined to re-establish the operations of the airline up and running in 2024. Further announcements regarding the launch date of Jet Airways will now be made in the coming weeks," the release added.

The National Company Law Appellate Tribunal (NCLAT), on August 28, granted an extension of time to the Jalan Kalrock Consortium, which is the successful resolution applicant for Jet Airways, to make a payment of Rs 350 crore to its lenders. JKC was permitted to make the payment by September 30.

The appellate tribunal permitted the use of Rs 150 crore from their performance bank guarantee to pay off Rs 350 crore. The use of bank guarantee was resisted by the creditors on the ground that it was a back up and cannot be utilised at this stage.  The case is likely to be heard again on October 4 for further deliberation.

JKC requested an extension for a payment due on August 31. NCLAT had instructed JKC to submit an application outlining the revised payment schedule. During earlier hearings, JKC was represented by senior advocate Ravishankar Prasad who informed the tribunal that the consortium would deposit Rs 100 crore by August 31 and another Rs 100 crore by the end of September.

It is the case of Jet Airways' creditors that JKC is yet to meet condition precedents mandated by the NCLT's order. The creditors have also claimed that JKC is not infusing enough funds to meet their financial obligations. However, JKC has contended that the creditors must start the process of transferring the ownership of the airline to enable them to transfer funds.

Meanwhile the creditors to the airline have also approached the Supreme Court against the NCLAT's May order permitting an extension to JKC to meet their condition precedents. On July 10, the creditors told the Supreme Court the airline be wound up as the resolution plan approved by the NCLT was not workable.

On January 13, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan. However, the CoC took it to NCLAT opposing the transfer.

Jet Airways was grounded in April 2019 over growing losses and a debt of about Rs 8,000 crore. In October 2020, the airline's CoC approved the revival plan submitted by the Jalan-Kalrock consortium.