Gujarat Exclusive > National-World > Ray of Hope: NCLT clears Jet Airways’ revival plan, stocks surge by 5%

Ray of Hope: NCLT clears Jet Airways’ revival plan, stocks surge by 5%

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In what could be a ray of hope for grounded airline Jet Airways, the National Company Law Tribunal (NCLT) on Tuesday approved the resolution plan for the airline submitted by the Kalrock-Jalan consortium.

Notably, Jet Airways was grounded in April 2019 after suffering a severe financial crunch. An SBI-led consortium had then referred it to the NCLT for resolution under the insolvency and bankruptcy code (IBC). The airline’s slots had been allocated to other airlines after it was grounded. The decision marks the first step in what could be the return of India’s oldest and largest private airline.

Offer by the consortium

In October 2020, a consortium led by Murari Lal Jalan and Kalrock Capital secured the bid for Jet Airways after several rounds. While Kalrock Capital is a UK-based asset management company, Murari Lal Jalan is a UAE-based entrepreneur.

The Kalrock-Jalan consortium is believed to have offered Rs 1,183 crore as repayment over five years to financial creditors, employees and other staff of Jet Airways. It has also offered about a 9.5 per cent stake in Jet Airways and a 7.5 per cent stake in Jet Privilege to financial creditors. Major creditors include SBI, IDBI Bank, Yes Bank and Canara Bank.

DGCA to allot slots

The Directorate General of Civil Aviation (DGCA) and Ministry of Civil Aviation (MCA) have been given 90 days starting today to allot slots to the airline, according to media reports. As per the NCLT order, the DGCA will take the final decision on the allotment of slots to the airline. A government official said that the DGCA and MCA will study the detailed order before deciding on slots.

In a recent affidavit submitted to the bankruptcy court, the MCA and DGCA said that Jet Airways may not be in a position to claim historical slots. The government and the civil aviation regulator also said that the allocation of slots would be done under existing guidelines.

Stocks surge

Following the NCLT’s approval, shares of Jet Airways hit the 5 per cent upper circuit on the National Stock Exchange (NSE). The stock ended the day in the green with a surge of 4.96 per cent to Rs 99.45 per share.

 

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