Jet Airways public shareholding to reduce to 0.2% after takeover | Exclusive

Public shareholders of Jet Airways are staring at a wipe-out in their share value as their stake in the company would decline to 0.2 percent after the Jalan Kalrock Consortium takes over the airline. According to the resolution plan document accessed by CNBC-TV18, the Jalan Kalrock Consortium has proposed to reconstitute public shareholding from 25 percent to 0.21 percent, resulting in an almost complete wipe-out of the present market value of holdings of public shareholders.

Public shareholders currently own around 23 percent of the over Rs 800 crore market cap company. The plan also proposes that the resolution applicant will restore public shareholding to 10 percent within 18 months and to 25 percent within three years.

According to the Jalan Kalrock Consortium's shareholding pattern proposal, after it takes over the airline, shares adding to 89.7 percent of equity would be issued to the new promoters, and equity of 9.5 percent would be issued to assenting financial creditors after the conversion of debt.

Meanwhile, lenders have taken a 95 percent cut in the resolution plan and in return they had settled at a share in equity, employees and workmen would get 0.5 percent equity after the takeover.

The revival plan of Jet Airways, which was granted the Air Operator Certificate to start commercial flight operation in May, has been hitting roadblocks in the last few months.

Last week, sources told CNBC-TV18 that Jet Airways' erstwhile Resolution Professional and Head of Monitoring Committee Ashish Chhawchharia sent a notice to Sanjiv Kapoor objecting to his designation as CEO of Jet Airways.

In the notice, the Monitoring Committee asked Kapoor not to make any statements on behalf of Jet Airways and added the sources as his statements can be misleading and can cause confusion in the minds of stakeholders

Later, Jalan-Kalrock issued a statement saying Sanjiv Kapoor would remain the CEO-designate of the company till the airline’s ownership is transferred to the consortium by the lenders.

At the end of last month, sources told CNBC-TV18 that few senior management, cabin crew, and pilots had exited the airline amid its relaunch uncertainty. The senior executives who exited the airline included heads of engineering and human resources. Latest addition to the exits is the head of communications who resigned last week.

Earlier last month, the JKC moved the NCLT to seek a transfer of ownership of the airline, the matter will be heard by the court this week

In November, the Jet Airways Cabin Crew Association (JACCA) moved the NCLAT seeking liquidation of Jet Airways' assets after the consortium defaulted on payments committed in the Resolution Plan.

The news of the pay cuts and leaves without pay came in November as the JKC, which won the bid to resurrect the airline, was forced to take drastic cost-cutting measures. These included pay cuts and Leave Without Pay for many of the 230 employees.