Qingdao Kingdom Health Industry Co., Ltd. (JKC), has recently seen a setback in its efforts to revive Jet Airways, India’s second-largest airline by market share. The National Company Law Appellate Tribunal (NCLAT) refused to stay the revival plan proposed by JKC for Jet Airways at an hearing on July 15th 2020.
The NCLAT order came as a blow to JKC’s plans which sought to take over the debt-ridden airline and bring it back from the brink of insolvency. People familiar with the matter told Businessline that lenders of the airlines are likely to appeal against this decision at Supreme Court of India.
Jet Airways is facing financial crisis since last year when it defaulted on loan payments due largely to high fuel costs, low fares and intense competition among Indian carriers. It was forced into bankruptcy proceedings in June 2019 after failing to secure emergency funding from lenders led by State Bank of India(SBI). Since then it has been grounded leaving thousands without jobs and many routes disrupted across India aviation sector.
In April 2020, JKC had offered Rs 8500 crore ($1 billion) for Jet airways through its special purpose vehicle entity Skyline Platinum Investment Pvt Ltd but SBI rejected their offer citing “it does not provide any value” for creditors or employees who are owed money by Jet airways . According to reports, SBI revived interest in October when they announced fresh expressions of interest seeking bidders willing invest up 5300 crores($700 million )in cash along with 3000 crore ($400 million )interest free loan ,but later received only one bid from London based Kalrock Capital & Murari Lal Jalan who were disqualified because they failed meet conditions laid down in expression of interests document issued by SBI .
Following this development , NCLAT asked both parties – SBI and JKC-last week whether there is possibility settlement between two sides out court while hearing case filed by consortium US hedge fund Adi Partners against banks reviving bidding process amid pandemic situation .
In spite these latest developments ,the revival plan will still be kept alive until further notice given position taken various stakeholders as well legal complexities involved resolution process going forward . This also means that thousands employees remain uncertain about future employment prospects despite being hopeful return back work earlier once airline returns flight operations again future date yet determined .
Post time: Mar-02-2023