Jet Airways relaunch likely to be delayed — Jalan-Kalrock consortium yet to fulfill its payment obligations

There are fresh clouds over the relaunch of Jet Airways. CNBC-TV18 has learnt that the Jalan-Kalrock consortium, which won the airline through the Insolvency and Bankruptcy Code (IBC) process, has not yet fulfilled its various payment obligations — and the deadline is just around the corner.

There are two deadlines which the Jalan-Kalrock consortium has to meet and as things stand, it looks to be in danger of missing both.

First, the consortium has to pay Rs 52 crore to workmen and employees of the erstwhile airline by the end of business on November 11. Sources say that this payment has not been made as yet. The second deadline has to do with the payment of Rs 185 crore to various lenders. The consortium has till November 16 to make this payment, and CNBC-TV18 has learnt that this has also not been made so far.

The consortium had told the court that the effective date for its resolution plan would be the May 20, 2022, and as per the resolution plan submitted by it, it had proposed to pay employees within 175 days, and lenders within 180 days from the effective date.

The Jalan-Kalrock consortium will get ownership of Jet Airways only after the first tranche of payments to lenders is made. So, if the consortium does not get transfer of ownership, it cannot lease aircraft in the name of Jet Airways.

Also any delays will mean that Jet’s quick return to Indian skies is in jeopardy. The relaunch target has already been extended by the consortium multiple times, with the last target of October also being overshot.

But that’s not the only cloud hanging over Jet Airways' relaunch. The recent NCLAT order directed the consortium to pay provident fund and gratuity dues in full for all eligible employees until the commencement of insolvency — that’s till June 2019. Sources say this amount works out to over Rs 200 crore. CNBC-TV18 has learnt that the resolution professional has not yet given the company, the final amount payable, and so this has not been paid so far.

Sources also say that the consortium has not deposited any of the Rs 900 core it had committed towards capex and working capital requirements either. So in all, against the proposals and the commitments, the consortium has to pay close to Rs 237 crore – not including the statutory dues.

So far, the consortium has not responded to CNBC-TV18’s queries on this matter. But as things stand, if the two deadlines pass by without payments being made, Jet’s take-off in its new avatar looks quite uncertain.