Winners of Jet Air bid seek SC approval for revised payment plan

31 Jan 2024 CW Team

JKC approached the apex court subsequent to its directive on January 17, instructing the winning bidders to pay Rs 1.5 billion by January 31, under the threat of "serious consequences."

Sources indicated that the lenders have rejected the offer, expressing frustration with the delaying tactics employed by the consortium.

A person familiar with the deliberations stated, "From the lenders' perspective, we are merely observers in this case now, and we will adhere to what the Supreme Court decides. The facts are evident to everyone, and there is nothing the banks can do."

The consortium, consisting of Murari Lal Jalan based in Dubai and the UK's Kalrock Capital, along with the committee of creditors led by the State Bank, comprising 11 banks, has enlisted lawyers to convince the court to accept the new plan, citing funding from Dubai.

Due to both promoters being non-resident Indians (NRIs), obtaining permission from the Reserve Bank of India (RBI) takes time, governed by the Foreign Exchange Management Act. The process of securing a fresh guarantee was delayed by bank holidays. A lawyer stated, "This payment plan will enable us to comply with the Supreme Court's directives, ensuring that the consortium already possesses Rs 1.5 billion in India, which can be immediately deposited in the share application of Jet Airways."

Despite an extended legal battle, the Jalan-Kalrock consortium remains committed to reviving the airline, as explained by the lawyer. He highlighted the lenders' failure to fulfill the conditions outlined in the resolution despite multiple reminders. Seeking regulatory approval for director appointments from the registrar of companies has been a time-consuming process, hindered by delays.

The consortium, victorious in the bid to operate the airline through a bankruptcy process led by the State Bank of India, has faced challenges in taking ownership of the airline. The consortium has incurred expenses exceeding ?300 crores for hiring executives to conduct probing flights, an essential element in maintaining the air operator's certificate's validity.

The Jalan-Kalrock Consortium (JKC), the entity that successfully emerged as the resolution applicant for Jet Airways, has appealed to the Supreme Court to permit the substitution of a Rs 1.5 billion performance bank guarantee with a new financial instrument. The consortium conveyed to the court in its petition that upon the release of the bank guarantee by the lenders, led by the State Bank of India, it would deposit Rs 1.5 billion within seven days. JKC approached the apex court subsequent to its directive on January 17, instructing the winning bidders to pay Rs 1.5 billion by January 31, under the threat of serious consequences. Sources indicated that the lenders have rejected the offer, expressing frustration with the delaying tactics employed by the consortium. A person familiar with the deliberations stated, From the lenders' perspective, we are merely observers in this case now, and we will adhere to what the Supreme Court decides. The facts are evident to everyone, and there is nothing the banks can do. The consortium, consisting of Murari Lal Jalan based in Dubai and the UK's Kalrock Capital, along with the committee of creditors led by the State Bank, comprising 11 banks, has enlisted lawyers to convince the court to accept the new plan, citing funding from Dubai. Due to both promoters being non-resident Indians (NRIs), obtaining permission from the Reserve Bank of India (RBI) takes time, governed by the Foreign Exchange Management Act. The process of securing a fresh guarantee was delayed by bank holidays. A lawyer stated, This payment plan will enable us to comply with the Supreme Court's directives, ensuring that the consortium already possesses Rs 1.5 billion in India, which can be immediately deposited in the share application of Jet Airways. Despite an extended legal battle, the Jalan-Kalrock consortium remains committed to reviving the airline, as explained by the lawyer. He highlighted the lenders' failure to fulfill the conditions outlined in the resolution despite multiple reminders. Seeking regulatory approval for director appointments from the registrar of companies has been a time-consuming process, hindered by delays. The consortium, victorious in the bid to operate the airline through a bankruptcy process led by the State Bank of India, has faced challenges in taking ownership of the airline. The consortium has incurred expenses exceeding ?300 crores for hiring executives to conduct probing flights, an essential element in maintaining the air operator's certificate's validity.