- The Jalan-Kalrock Consortium (JKC) has repeatedly failed to make payments to creditors, despite receiving extensions and approval from the Committee of Creditors (CoC) and the court.
- The CoC has spent a significant amount of money each month to cover expenses incurred by the airline, but has not received any money back from the JKC.
- The JKC denies allegations that it has not invested any of its own money into the airline, claiming to have already invested INR 2.5 billion ($30 million), including INR 1 billion ($12 million) deposited when the proposed revival plan was approved.
The Jalan-Kalrock Consortium (JKC) has once again been alleged to have not made the promised payments to the creditors. The Committee of Creditors (CoC) was anticipating payments from the airline consortium, which has continuously fallen behind. The JKC has received multiple extensions for its payments, both from the CoC and the court, since 2022. The consortium is in the process of shelling additional money through commercial loans.
After Jet Airways suspended operations in April 2019, the airline owed nearly INR 100 billion ($1 billion) to its creditors. The JKC became the winning bidder of the airline’s revival plan (Jet Airways 2.0) under the Insolving and Bankruptcy Code (IBC) of India. The National Company Law Tribunal (NCLT) approved the resolution plan by the JKC, with approval from the committee of creditors. The JKC took over the grounded airline in the second quarter of 2021, hoping to bring the household name back into the skies.
The CoC backed the JKC initiative with conditions of receiving a series of payments over the course of the defined time. The CoC was also open to pumping additional money into the airline if and when it commenced operations. While the CoC continued its financial support towards the revival of the airline, it failed to receive any money back from the JKC. The CoC spends nearly INR 230 million ($2.8 million) each month to cover monthly expenses incurred at the airline.
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The JKC came under scrutiny when it failed to fulfill its promise despite multiple extensions. The CoC has appealed to the NCLT about the JKC not having a revival plan in place and that it has not received any promised payments to date. After at least three six-month extensions since April 2022, the JKC was scheduled to make the first payment by May.
Most recent events
The CoC also alleged that JKC had not invested any of its own money into the airline. The JKC denies that allegation by saying that it has already invested INR 2.5 billion ($30 million) into the airline. The total amount includes a sum of INR 1 billion ($12 million) that was deposited as soon as the NCLT approved the proposed revival plan for the airline.
The JKC seems to have been faced with multiple challenges in an effort to revive the airline. Earlier this month, Jet Airways lost its unique airline code, adding another complexity to the already complex equation. Losing airline code means officially commencing operations, and returning to service becomes more difficult. While the code can be reinstated, failing to make payments to the creditors is a greater problem at hand.
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The CoC has also stated that the insolvency resolution plan has not been implemented by the JKC. The JKC is in the process of acquiring the additional amount, which was already approved on the liability condition. The JKC is waiting for the Punjab National Bank’s liability of INR 2 billion ($ 24 million) to be accepted. The approval is up in the courts, with a hearing scheduled for October 3rd.
What are your thoughts on the continuation of the Jet Airways 2.0 saga? Tell us in the comments section.
Source: B2B Chief