Jet Airways Revival Plan: More than 90% haircut plan approved, after 28 years management will be in foreign hands

Jalan-CalRock resolution plan has to be implemented within 90 days.

Jet Airways Revival Plan: The management of the airline Jet Airways is almost certain to go into foreign hands after 28 years. The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday approved the proposal of UK’s CalRock Capital and UAE-based industrialist Murali Lal Jalan for revival of bankrupt Jet Airways. This has raised the possibility of the bankrupt airline Jet Airways flying again after about two and a half years. The Jalan-Calrock consortium had made an offer of Rs 1183 crore to the borrowers, which has been approved. Although the total liability of Jet Airways is Rs 15525 crore, that is, the revival plan has been approved with about 92.38 percent haircut.

The consortium had offered to pay Rs 1,183 crore to the financial creditors, employees and employees of Jet within the next five years. Apart from this, financial creditors were also offered 9.5 per cent stake in Jet Airways and 7.5 per cent in Jet Privilege. It should also be noted here that on September 25, 2020, a loan of 40 thousand crores was claimed on Jet Airways by all the borrowers including operational creditors, in which SBI had the maximum loan of Rs 1636 crore.

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Solution plan to be implemented within 90 days

Jalan-CalRock resolution plan has to be implemented within 90 days. The airline will not get the slots given earlier at the airport. In such a situation, the consortium will have to obtain the necessary licenses from the Directorate General of Civil Aviation (DGCA) and the Ministry of Aviation by applying for slots at the airport. If this is not possible, the consortium will have to re-apply to the NCLT for extension of time.

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No problem in getting new slots

According to aviation sector experts, even if the consortium does not get the earlier slots, Jet Airways will not face any problems in getting the new slots as flights are decreasing in the current tour due to the corona epidemic, due to which many slots are available. Currently, flights are being done with 50 percent capacity. Once the flying schedule becomes normal, DGCA will be free to re-allocate the slots and no airline can claim the earlier slots.
However, according to Ashish Pyasi, Associate Partner, Dhir and Dhir Associates, Jet Airways may face legal hurdles if someone appeals against this resolution plan. If this happens, there may be a delay in the implementation of the resolution plan.