Jet Airways relaunch in jeopardy; B777 sold for $9mn
The attempt to rescue and relaunch Jet Airways (JAI, Mumbai Int’l) is likely to be prolonged, or even jeopardised, as the airline faces fresh litigation. Meanwhile, Dutch administrators have sold one of the carrier’s Boeing widebodies for USD9 million, a monitoring committee official revealed.
While the consortium behind the attempted relaunch comprising Murari Lal Jalan, a UAE-based Indian investor, and UK fund Kalrock Capital, had planned to resume flight operations by early 2022, the Punjab National Bank, a nationalised New Delhi-based bank, has alleged irregularities in the plan. The bank approached the National Company Law Appellate Tribunal (NCLAT) alleging “gross irregularities” in the bankruptcy resolution, and the tribunal agreed to hear the case on September 21.
According to its tribunal filing, the bank – India’s second-biggest state lender – argued that the airline’s court-appointed official in charge of the revival, Ashish Chhawchharia, had initially accepted its claim of almost INR10 billion rupees (USD136 million) but then reduced it by INR2 billion (USD27 million).
The tribunal has also agreed to hear claims that two Jet Airways unions filed raising concerns over unpaid salaries and retirement benefits under the restart plan. The airline was grounded in April 2019 following an acute cash crunch and growing debt pile.
Separately, B777-300(ER) VT-JEW (msn 35164), seized at Amsterdam Schiphol together with slots at the airport over unpaid debts, has been sold for USD9 million. It has remained stored at Schiphol since April 2019. KLM had been interested in buying the twinjet and the slots, but the deal fell through less than a year later.
Chhawchharia announced the acquisition in a letter to the National Stock Exchange of India dated September 4, declaring: “This is now to inform that as per the information received from the Dutch Administrator, the equipment under the custody of the Dutch Administrator has been sold to [Miami-based entity] IAGCAS 777 LLC for USD9 million under the Dutch Insolvency Process.”
The proceeds from the sale “will be first utilised for the closure of the Dutch Insolvency Process, to ensure the company is no more declared insolvent in the Netherlands, and the balance of the funds, if any, shall be repatriated to India […]. We wish to further inform that subsequent to the sale of the equipment and after completing the requisite formalities, the Dutch Insolvency Process shall stand concluded,” he added.
Jet Airways was declared bankrupt in the Netherlands in May 2019 and its insolvency proceedings there have been separate from its liquidation in India. The airline continues to own a further five B777-300(ER)s, the ch-aviation fleets advanced module shows, two of which are stored at Delhi Int’l and three at Mumbai Int’l. The airline’s owned assets also include one A330-200, two B737-800s, and one B737-900.