Jet Airways insolvency: Legal issue cured, lenders begin voting on two bids

The 'legal issue' that briefly put the Jet Airways insolvency process at risk last week has now been 'cured,' clearing the decks for the voting on the two bids.

In other words, the process that began in June 2019 has finally reached a stage where it is close to the finishing line, after repeated delays and seemingly endless twists and turns.

As was reported earlier by Moneycontrol, legal issue cropped up after a risk assessment of the two consortiums and their bids was done by the Indian unit of Kroll, a US-based corporate investigations and risk consulting firm. The issue pertained to the bid presented by the FSTC-Imperial Capital combine.

The meeting on September 30, attended by lenders, resolution professionals and representatives of the two bidders, was originally called to discuss the bids presented by the FSTC-Imperial Capital combine, and the Kalrock Capital-Murari Jalan consortium.

The meeting was later held on October 3.

"The final resolution plans submitted by the two resolution applicants were discussed and deliberated by the CoC members and after due consideration it was decided that both the resolution plans shall be put for e-voting for approval of the CoC members," Jet Airways resolution professional said in an announcement late on October 3.

Once a resolution plan is approved by the CoC by requisite majority, an application shall be filed by the resolution professional for the approval by the NCLT. The requisite majority is 60 percent or higher.

"The lenders accepted the response given by the FSTC-led consortium and the legal issue was deemed to be cured," a senior official told Moneycontrol. A second executive added that this was accepted by other stakeholders, including the Kalrock-Jalan combine, too.

State Bank of India is the lead lender to Jet Airways. The airline, which was grounded in April 2019, owes banks about Rs 8,000 crore and its total claims have reportedly touched Rs 40,000 crore.

Executive had earlier told Moneycontrol that the voting could take up to two weeks. The deadline to complete the resolution process is October 21.