NCLT Allows Transfer of Airline’s Ownership to Jalan-Kalrock Consortium

Shares of Jet Airways on Friday surged 5 per cent after the National Company Law Tribunal has allowed the transfer of ownership of the airline to winning bidder Jalan-Kalrock consortium. The tribunal also approved the ownership effective date of the resolution plan as November 16, which means from this date onwards, the consortium gets six months or 180 days to settle lenders’ dues.

So far, the Jalan-Kalrock consortium has deposited bank guarantees worth Rs 150 crore with the lenders. As per the resolution plan, the consortium has to make cash payments of Rs 185 crore to financial creditors within 180 days from the effective date.

The consortium had also proposed a total cash infusion of Rs 1,375 crore, including Rs 475 crore for payment to stakeholders from this. The remaining Rs 900 crore was to be infused for capital expenditure and working capital requirements. At Rs 380 crore, the lenders took a steep haircut on their admitted claims of over Rs 7,807.7 crore under the approved resolution plan.

The order comes after the JKC had sought directions from the bench for the transfer of Jet Airways ownership and to set the ownership transfer date as the starting date for the 180-day deadline. However, Jet Airways’ lenders had opposed the transfer of ownership, stating the conditions precedent had not been met by the consortium.

This had been a point of disagreement between the Jet Airways lenders and JKC that caused a standoff, as the National Company Law Appellate Tribunal (NCLAT) order of October 21 stated that JKC has “completed all necessary conditions precedent to the satisfaction of the monitoring committee.

The effective date is not the transfer date; it is when conditions precedent as per plan are deemed to have been met. As per NCLT approved resolution plan, JKC is allowed 180 days from the effective date to make the payment to creditors.

Jet Airways shut down in April 2019 over piling losses and a debt of about Rs 8,000 crore. A consortium of London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan emerged as successful bidders in the Jet Airways insolvency resolution process.

On 22 June 2021, the tribunal in its order had approved the resolution plan submitted by the Jalan-Kalrock consortium subject to necessary approvals. The consortium comprises UAE-based non-resident Indian Murari Lal Jalan, who will hold shares in Jet Airways in his personal capacity, and Florian Fritsch who will hold shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.

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