NCLAT upholds Jalan-Kalrock Consortium’s resolution plan for Jet Airways

The National Company Law Appellate Tribunal (NCLAT) has upheld the debt resolution plan for bankrupt Jet Airways submitted by the Jalan-Kalrock Consortium (JKC), clearing the path for the transfer of ownership and revival of the airline.

Jet Airways said the appellate tribunal approved the resolution plan in toto, and issued directions to lenders to complete transfer of ownership within 90 days. It has also directed them to adjust the Rs150 crore paid by the consortium as performance bank guarantee.

The lenders of Jet Airways and Jalan-Kalrock Consortium (JKC) have been in a legal tussle for more than a year over the performance bank guarantee of Rs150 crore submitted by JKC, the successful applicant.

The lenders had moved the Supreme Court, which, however, declined to interfere in the matter and directed the NCLAT to decide on the matter. 

NCLAT, in its ruling, has directed the committee of lender administering the grounded carrier, to create a security of all immovable properties of Jet Airways as sought JKC within 30 days.

Further, it has directed the committee of lenders led by SBI to adjust the performance bank guarantee of Rs150 crore towards payment of the amount offered under the resolution plan.

Subject to regulatory approvals, Jet Airways can restart operations once the current administrators hand over management to JKC, 

Jet Airways had, in September 2023, acknowledged the completion of financial commitments of Rs350 crore by JKC, following the infusion of an additional Rs100 crore in the grounded carrier.

Jalan- Kalrock consortium’s final resolution plan, submitted on 2 October 2020, had the approval of 99.22 per cent of the creditors. While Jet Airways will continue to list on the stock exchanges, it will be on a reconstituted capital where each shareholder will be entitled to only 1 share for every 100 shares held.