• Factors that led to the issue:
 2015 – Jet acquired Air sahara – with huge price – led to huge loses.
 Competition from low budget airlines like Indigo, Go-air.
 Rising fuel prices.

• Debt – ₹8,000 crore to lessors, suppliers, pilots and oil companies.

• Lenders were searching for prospective buyers.

• Denied ₹400 crore as emergency fund – later
it was jet grounded.
• A Resolution Plan: rehabilitation plan for a
Corporate Debtor (CD) going in insolvency.
 Section 5 (26) of IBC 2016 – “Resolution plan means a plan proposed by resolution
applicant for insolvency resolution of the corporate debtor as a going concern in
accordance with Part II”
• Mandatory contents of the resolution plan:
Financial creditors and Operational creditors.
 Financial creditors: relationship with the entity is a pure financial contract – loan or a debt security.
 Operational creditors – liability from a transaction on operations.

• Committee of creditors (CoC) is set up – comprising of financial creditors.
 Appoint a resolution personal/ professional.

• Resolution personal
 Appointed by CoC
 Presents a resolution plan to the CoC
 CoC must approve a resolution plan.
 Resolution process must be
completed within 180 days – may be extended by a period of up to 90 days after NCLT’s approval.

Jet Airways Resolution Plan.

• Mumbai Bench of the NCLT has approved it.

• Resolution plan from a consortium.
 UAE-based businessman Murari Lal Jalan and U.K.- based Kalrock Capital. • Details
 Total claims – ₹15,432 crore
 Jalan-Kalrock consortium – to pay creditors & banks – ₹1,183 crore over a 5 period.
 First tranche of ₹280 crore – paid in cash after 180 days of the new promoters taking ownership of the jet airline.

 Second instalment of ₹195 crore – paid in next 730 days.
 Balance – paid through a mix of cash, proceeds generated from the sale of assets and annual cash flows generated by airline.
 Stock the distribution
 Banks – 9.5%
 Consortium – 89.79%
 Employees – 0.5%
 Public shareholding – 0.21% • Challenge – Getting the slots back for the jet airlines is going to be difficult and expensive.


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