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Jet Airways take off soon? Consortium agrees to make first tranche of payment as lenders waive two preconditions

Jet Airways went bankrupt in 2019. The case before the National Company Law Tribunal (NCLT) went on for two years before a debt resolution plan by the Jalan-Kalrock consortium was approved. However, the lenders’ consortium had said it would give a NOC only after the new owners commit to a timeline for implementing the plan.

ET Now Digital

Updated Oct 6, 2022, 07:27 IST

New Delhi: The planned relaunch of Jet Airways late last month has been delayed owing to the Jalan-Kalrock consortium's unresolved talks with Jet’s former lenders, who have now agreed to give up two preconditions. Facilitating the takeover of Jet Airways by the consortium, lenders, who wanted their dues settled before the carrier buys or leases aircraft, have decided to waive the preconditions.

The lenders led by public sector lender State Bank of India (SBI) had given their nod for the resolution plan by the consortium in October 2020. However, the implementation of Jalan-Kalrock consortium’s resolution plan was conditional on the validation of Jet's air operator's permit, approval of the business plan and 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. However, the completion of the deal still hinges on payments to lenders without which control will not be transferred," a person aware of the developments told Economic Times.

Now, as the lenders have decided to forego two preconditions, the consortium in return agreed last week to make the first tranche of its payment to lenders so that the stalled deal gets going.

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, the person added.

As per the National Company Law Tribunal (NCLT)-approved resolution plan, the consortium offered payouts of Rs 380 crore in instalments and a 9.5 per cent stake in the carrier to the lenders.

Jalan-Kalrock consortium has agreed to start repaying lenders and the first tranche "will be released soon", according to a person close to the consortium shared without giving details of the amount or the time frame.

The State Bank of India-led lenders’ consortium had earlier said it would give a NOC only after the new owners commit to a timeline for implementing the debt resolution plan, which involves a staggered payout. Until this is provided, Jet’s ownership cannot be transferred to the Jalan-Kalrock consortium.

Meanwhile, the airline has missed its internal deadline of September end for the commencement of ticket sales.

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