Creditors to Jet Airways have approved a resolution plan which will give the country’s oldest private carrier a new lease of life, the airline said in a regulatory filing on Saturday.
Eighteen months after it shut down and sixteen months after it became the first airline company to be admitted under the insolvency and bankruptcy code (IBC), a plan submitted by a consortium of London-based Kalrock Capital and UAE-based businessmen Murari Lal Jalan was approved on Saturday.
In April 2019, Jet — which operated a fleet of more than 120 planes serving dozens of domestic destinations and international hubs such as Singapore, London and Dubai — was forced to ground all flights, crippled by mounting losses as it attempted to compete with low-cost rivals.
Claims made by financial creditors, operational creditors and employees have ballooned to over Rs 40,000 crore, out of which claims to the tune of Rs 15,525 crore has been admitted by the resolution professional.
Financial creditors such as SBI, Yes Bank, and others have claimed Rs 11,344 crore but only Rs 7,459. 80 crore has been admitted.
The approved proposal will now go to the National Company Law Tribunal. After the tribunal approves it, the airline will have to apply to the civil aviation ministry for its approval.
Jet Airways RP (resolution professional) Ashish Chhawchharia said in a filing to the bourses that the plan was approved after the conclusion of the e-voting on Saturday.
Jet Airways had received another valid bid from the consortium of Haryana-based Flight Simulation Technique Centre, Big Charter of Mumbai and Abu Dhabi’s Imperial Capital Investments LLC.
On Friday, the airline had extended the deadline for voting as only half the lenders had submitted their votes and the remaining had sought time till Saturday evening to submit their votes.
Under IBC norms, an approval by 66 per cent (by value) of the lenders is necessary for a resolution plan to go through. While the announcement was silent on how much votes the winning plan secured, it is understood to be over 70 per cent.
Financial details of the winning plan will be known once it is presented to the NCLT.