Jet lenders to be paid ₹600 crore over two years
NEW DELHI: The consortium chosen to resurrect Jet Airways (India) Ltd has proposed to invest ₹600 crore in the first two years in the grounded airline to repay creditors and acquire an 89.79% stake in the carrier.
This would include raising ₹125 crore from selling non-core assets of Jet Airways, lenders to the bankrupt airline told the Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday.
The consortium comprising London-based asset management firm Kalrock Capital and entrepreneur Murari Lal Jalan is currently awaiting the bankruptcy court’s approval to restart Jet that stopped flying in April 2019 amid an acute cash crunch and large debt.
The group has proposed to invest ₹475 crore in the first two years and ₹125 crore from the sale of existing non-core assets like realty and luxury cars of the airline by the end of the first year. It has also proposed to pay ₹131 crore, ₹193 crore, and ₹259 crore at the end of the third, fourth and fifth year, respectively, to financial creditors from the airline’s cash flows.
Overall, the consortium hopes to repay ₹1,183 crore to creditors over five years, which would include collections from asset sale proceeds and cash flows.
A committee of creditors (COC) of Jet Airways had in October 2020 approved the revival plan submitted by the Kalrock-jalan group. The consortium plans to make an initial investment of ₹280 crore within 180 days of the court approving the resolution plan, a lawyer representing the resolution professional for Jet told NCLT. This will be used to pay off financial creditors (₹107 crore), corporate insolvency resolution process or CIRP (₹43 crore), workmen and employees (₹113 crore), other creditors (₹9 crore), and contingency fund (₹8 crore). The group has also proposed to pay ₹195 crore to financial creditors by the end of 730 days or the second year from the completion of the process. The successful completion of the investment plan would result in the consortium taking an 89.79% stake in Jet Airways. The other shareholders would be assenting financial creditors (9.5%), workmen and employees (0.5%) and public shareholders (0.21%). Stakes held by former promoter Naresh Goyal and family, Etihad Airways, and financial institutions will be extinguished, the resolution professional’s lawyer informed the NCLT.