Jet Airways Lenders May Sell 11 Planes As Resolution Plan Delayed
November 25, 2022: Banks received six Expressions of Interest (EoIs) for these planes in August. However, Jet Airways’ monitoring committee, which includes representatives from the banks and the Jalan-Kalrok consortium, decided to suspend the process.
The bankers believe that the 11 planes in their possession are depreciating, so it may be time to reconsider selling them.
Frustrated by the delay in implementing the resolution plan, Jet Airways’ creditors may sell the defunct carrier’s 11 aircraft, effectively forcing it into liquidation.
Jet Airways’ resolution plan was approved by the National Company Law Tribunal (NCLT) about a year and a half ago but the Jalan-Kalrok consortium has failed to pay the required amount.
While the banks approved the resolution plan in October 2020, the NCLT approval came in June 2021. Bankers said the failure to repay the money has prompted them to reconsider their options.
“Nobody thought it would take this long to run. But the fact is that the banks cannot transfer the company until we get the money, and the way things are, it looks like the deal will not be executed soon,” said a person familiar with the development.
Meanwhile, the 11 planes we have are also losing value. Maybe it’s time to reconsider selling it, the person told The Economic Times.
In August, banks received six Expressions of Interest (EoIs) for the purchase of these planes. However, Jet Airways’ monitoring committee, which includes representatives from the banks and Jalan-Kalrok, decided to postpone the process, ET reported last week.
Now that they’re seeing some interest in the plane, some bankers believe lenders have another window to recover, albeit a small one.
“The Jalan-Kalrok consortium has filed an intervention petition in the NCLT, which comes to see what they tell the court and act accordingly,” shared another person.
The Jalan-Kalrok consortium has blamed the banks for the delay in the implementation of the resolution plan, and bankers expect the consortium to continue this argument at the next hearing.
Furthermore, they are preparing a Plan B to close the case, even if it means liquidation. The trust’s deficit has widened with no prospect of payment despite its agreement to waive two preconditions to facilitate the takeover of Jet Airways, according to bankers.
“Although there were preconditions for the implementation of the scheme, the banks agreed not to oppose it in court if the consortium sought relief.
But instead, Jalan-Kalrok has started blaming the banks for the delay, which has cast doubt on their intentions,” said the first person quoted above.
A consortium of lenders led by the State Bank of India had earlier said it would grant the NOC only after the new owners commit to a timeline for implementing a debt resolution plan, including payments. Unless this is provided the ownership of the jet cannot be transferred to the consortium.
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