Lenders led by the State Bank of India (SBI) approved the resolution plan by the consortium in October 2020. However, the plan’s implementation was conditional on the validation of Jet’s air operator’s permit, approval of the business plan and, most critically, the approval to re-allot all suspended slots including bilateral and air traffic rights to Jet.
“Because of the delay in the implementation of the plan, lenders have agreed not to oppose any plea by the consortium in the NCLT seeking a waiver of these conditions,” said a person aware of the developments. “However, the completion of the deal still hinges on payments to lenders without which control will not be transferred.”
The 15-month delay after the National Company Law Tribunal (NCLT) had approved the plan has made lenders wary of the consortium’s promises.
“Finally, it is all about money hitting our accounts. Until that does not happen, this transaction will not go through,” said a second person aware of the negotiations. “Jalan-Kalrock has never denied transferring the money but the fact that it has taken so long raises doubts on their intentions.”
According to the resolution plan, the consortium offered payments of ₹380 crore in instalments and a 9.5% stake in the airline company to the lenders. The National Company Law Tribunal (NCLT) approved its plan in June last year.
A person close to the Kalrock-Jalan consortium has agreed to start repaying lenders and the first tranche “will be released soon”, without elaborating on either the amount or the time frame.
Grant Thornton-backed resolution professional Ashish Chhawchha has admitted ₹7,453 crore in claims from financial creditors for which the consortium has offered payments totalling ₹1,010 crore over five years, including ₹380 crore in instalments, money from the future sale of assets and a 9.5% stake in the airline company.
But the request by the consortium to waive the preconditions also has raised more doubts.
“A court order in April, allowing an extension of the effective date of the resolution plan, had cited Jet’s lawyer saying all but one of the conditions – the Air Operator Permit – had been met,” said a lawyer in the know. “Those included the international traffic rights and securing the domestic slots. What is Jet talking about now?”
ET has seen a copy of the order.
This lawyer who has followed the case closely said that the extended effective date of the resolution plan – May 25 – has already lapsed.
“Lenders have allowed the deadline to lapse in the hope that they will get their money back. If they don’t soon, they will definitely take action,” he added.
Jet’s lenders have been adamant that the airline can’t buy or lease planes until the ownership is transferred; in other words, until their dues are settled.
“A timeline for the repayment of dues is critical to the recovery of Jet. Lenders have so far not got anything from the consortium. Frankly, the ball is in their court,” said the first person cited above.
Until the timeline or effective date of the debt resolution plan is provided, Jet’s ownership cannot be transferred to the consortium, lenders said.
Meanwhile, the airline has missed its internal deadline of September end for the commencement of ticket sales.