NCLT gives JLC 6 more months to pay and take control over Jet Airways

 The National Company Law Tribunal’s (NCLT) Mumbai bench has allowed the transfer of the ownership of Jet Airways to the Jalan Kalrock Consortium, according to CNBC-TV18.

The order was announced by the Mumbai bench of the tribunal on Friday. The effective date of the resolution plan has been taken as 16th November. The consortium has around six months to settle the dues and take control of Jet Airways.

So far, JKC has deposited bank guarantees worth Rs.150 crore with the lenders. The consortium has to make cash payment of Rs. 185 crore to the lenders within 180 days from November 16th.

As per the reports, Lenders’ counsel’s request to stay order for two weeks has been declined by NCLT.

The order came 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 stand-off, as NCLAT order of 21st October 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 the reports NCLT approved resolution plan, JKC is allowed 180 days from the effective date to make payment to creditors.

Jet Airways because of the piling losses and a debt of about Rs. 8000 crore had shut down in April 2019. JKC and UAE-based entrepreneur Murari Lal Jalan emerged as successful bidders in the Jet Airways insolvency resolution process.

There were two deadlines that JKC was supposed to meet but missed. First, the consortium needed to pay Rs.52 crore to work men and employees of the airline by November 11. The second was to do with payment of Rs.185 crore to various lenders. The consortium has to make the payment till November 16.

In between of all the growing differences between the consortium and the Jetway lenders, JKC asked the airline monitoring committee’s authorised representative Ashish Chhawcharia not to issue any communication on behalf of the grounded carrier without approval of all the members of the committee.