Jet Airways creditors to get 5% of the money they are owed
The new owners of recently revived Jet Airways proposed to pay 5% of the money they owe to the airline’s financial creditors. The order to repay debts comes after Jet Airways got the green light to recommence the operations, which previously was ceased due to financial insolvency.
Kalrock Capital and Murari Lal Jalan consortium proposed to pay 3.1 billion rupees ($51 million) of the 78.1 billion rupees ($1 billion) they owe to the airline’s financial creditors, according to the Mumbai bankruptcy tribunal order. 1.9 billion rupees ($25 million) will be paid upfront within six months while the rest will come from the proceeds. Adding to that, the new owners of the Mumbai-based air carrier have also proposed a 9.5% stake at Jet Airways for the airline’s creditors.
On June 22, 2021, Jet Airways got the National Company Law Tribunal’s (NCLT) approval to resume operations, two years after it ceased them due to financial insolvency. The hope of the Jet Airways revival ignited in October 2020, when its creditors approved a bid made by the consortium of Indian entrepreneur Murari Lal Jalan and the UK-based asset management firm Kalrock to restart the defunct airline.
“They have to work together with the ministry officials and airports to obtain the slots. In some airports, it may not be possible to operate the exact same slots. [...] If everything goes well, we can hope by the end of this year Jet Airways can fly again,” court-appointed representative Ashish Chhawchharia told Bloomberg.
The airline went into bankruptcy having operated at loss for years. Before the collapse in April 2019, Jet Airways had around 700 time slots allowing it to operate in and out of its hubs at Mumbai (BOM), Delhi (DEL), and Kempegowda airports (BLR). However, after Jet Airways suspension, the air carrier’s slots were relocated for other airlines.
Following the approval from the bankruptcy court to re-commence operations, the NTCL gave 90 days for the airline to figure out the issue with the former airline’s slots with a possibility to approach the court for extension of the term if needed.
Jet Airways might be taking back at least some of its historical slots. “We trust that the authorities concerned including the Government of India shall take a holistic approach and provide necessary assistance to the SRA / Corporate Debtor (Jet Airways) in terms of the guidelines in allocation of slots as and when they are sought, so that the Airlines takes off the ground and possibly regain its lost glory,” read the court’s statement.
If Jet Airways figures out the slot issue within 90 days, we could expect to see the airline back in the skies by the end of summer or early autumn 2021.
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