Jet Airways creditors at odds with owners over recovery plan -sources (updated)

Jet Airways (India)

28/11/2022 14:26

(Adds details)
    By Nupur Anand and Aditi Shah
       MUMBAI, Nov 28 (Reuters) - Jet Airways'  JET.NS 
creditors and its new owners are deadlocked over a resolution
plan to lift the Indian airline out of bankruptcy, putting its
future in limbo, four sources said.
    Creditors may approach India's aviation ministry to seek
approval to liquidate Jet's assets if there is no resolution on
Tuesday in a critical court hearing, a senior banker said. 
    "There are concerns the resolution plan may fall apart so we
are looking to see if we can at least get something out of this
deal via the liquidation route," the banker, who has direct
knowledge of the matter, told Reuters on Monday.
    Once India's biggest private airline, Jet ceased flying in
April 2019 after it ran out of cash. It was taken to bankruptcy
court by creditors owed about 180 billion rupees ($2 billion).
    A restructuring plan was approved by the National Company
Law Tribunal (NCLT) in June and Jet was set to resume operations
by the first quarter of 2022 under its new owners.
    However, disagreements between the new owners, a consortium
including London-based Kalrock Capital and UAE-based businessman
Murari Lal Jala, and its lenders risks derailing Jet's recovery.
    A spokesperson for Jet's owners said in a statement on
Monday that the resolution plan was binding upon all involved
parties and was approved by the bankruptcy court.
    "We are "working closely" with the erstwhile lenders of Jet
to implement this plan, and remain "fully committed" to getting
Jet Airways off the ground," it added. 
    State Bank of India, the lead lender in the creditor group,
declined to comment. The court-appointed resolution professional
overseeing the case did not immediately respond to an emailed
request for comment from Reuters.   
    CAPITAL NEED
    Jet's creditors believe it needs around 10 billion rupees of
capital to run its operations in full but it has not managed to
bring that amount to the table, the banking source said.
    "So far they have only shown that they have received 1.5
billion rupees worth of bank guarantees and around 200 million
of cash which is not adequate to run the operations," he added.
    But a source close to Jet said it has fulfilled all the
prerequisites of the resolution plan and the committee of
creditors has also undertaken due diligence on the Jalan-Kalrock
consortium's ability to inject funds.
    The 10 billion rupees is to be injected over two years with
2.7 billion to be paid more immediately to banks and other
creditors, the person added. 
    By not implementing the resolution plan, creditors are
causing unnecessary delays, the source close to Jet said adding
that the consortium has already invested more than 1 billion
rupees in the airline.  
 (Reporting by Nupur Anand in Mumbai and Aditi Shah in New
Delhi; Editing by Susan Fenton and Alexander Smith)
 ((Nupur.Anand@thomsonreuters.com; +9122 68414388;))