Jet Airways proposed resolution to pay off Rs 1,118 crores in 5 years, public stake to fall to 0.21%

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Debt-laden Jet Airways (India) Ltd. rescued by the consortium has proposed to invest Rs. 600 crores in the first two years to repay creditors and acquire an 89.79% stake in the carrier, Mint reported.

The debt resolution plan submitted by the consortium of London-based asset management firm Kalrock Capital and entrepreneur Murari Lal Jalan proposed to pay off Rs. 1,183 crores over the next five years.

The beleaguered airline will be injected with Rs 280 crore as an investment within the first 180 days of the approval of the resolution plan by the National Company Law Tribunal (NCLT).

This amount will be used to pay off financial creditors of Rs 107 crore, corporate insolvency resolution process or CIRP Rs. 43 crore), workmen and employees for Rs 113 crore, other creditors for Rs 9 crore, and the balance of Rs 8 crore will go to the contingency fund.

The consortium will also lead the payment for Rs 195 crore to financial creditors by the end of 730 days.

Out of the Rs 600 crores to be invested in the first two years, the consortium plans to invest ₹475 crore and the balance of Rs 125 crores will be from the sale of non-core assets like realty and luxury cars of the airline, the report added.

The Kalrock-Jalan consortium was declared the winning bidder for Jet Airways by the creditors' committee in October last year but is still awaiting the final clearance from NCLT before it can take over the airline.

After the completion of the resolution plan, the consortium will own an 89.79 percent stake in Jet Airways, a 9.5 percent will be held by banks and only 0.21 percent will remain with the public. Workmen and employees will own a 0.5 percent stake.