Jet Airways rescue plan unworkable, say lenders

livemint.com:

₹272 crore for provident fund and gratuity to the workers. Mehta said not paying these dues puts the resolution plan in breach of the provisions of the Insolvency and Bankruptcy Code (IBC). As the NCLT order has reached its finality, the resolution plan is deemed to be in violation of the IBC and is liable to be set aside.

Mehta said that lenders, including State Bank of India and Punjab National Bank, are expected to recover a total of ₹7,800 crore. However, even after two and a half years, JKC is yet to fulfil its obligation to make the scheduled payments in instalments. Mehta added that the total maintenance cost, including the upkeep of aircraft, is ₹386.72 crore, and monthly payments of ₹22.26 crore are being made to the airport for parking purposes by the lenders.

Other dues, such as those owed to the Airports Authority of India, remain unpaid. Mehta said a comprehensive examination of the facts and JKC’s conduct over the past three years would reveal that the plan has become non-workable. He asserted that there was never any intention to comply with the plan, and the rosy picture painted by JKC led the Committee of Creditors to accept it.

The lenders also said that in December, they received an update from the Directorate General of Civil Aviation (DGCA) stating that the Air Operator Certificate (AOC) would not be reissued to JKC. Without the AOC, the airline cannot resume operations. Senior lawyer Mukul Rohatgi, representing JKC, argued that if their plan is set aside, the only option for the airline would be liquidation.