Jet Airways’ financial woes since her first tenure came back to haunt her. The airline still owes money to several creditors and last year even put together a plan to start making payments. Now a group of creditors, led by one of India’s leading banks, is threatening the airline with insolvency if it does not pay them revenue from the lease of its planes.
The threat of liquidation
Two airlines will soon start operations in India – Akasa Air and Jet Airways. The difference between the two, however, is that while Akasa starts with a clean slate, Jet continues to haunt his troubled past.
Jet owes a lot of money to numerous creditors and stakeholders, including exesemployees and applicants for tickets. Therefore, any source of revenue for the airline is closely monitored, and attempts are made to direct the funds to those who demand their return.
Jet Airways is facing the threat of insolvency from its creditors. photo:
According to The Economic Times, lenders led by State Bank of India are threatening to push Jet Airways into liquidation if it is unable to distribute revenue from leasing its planes among its financing banks.
The report also says that Jet aircraft are on lease Air Serbia have brought in about $13.5 million so far. A person familiar with the matter said:
“At a meeting earlier this week, the banks informed the winning bidder that they would apply for liquidation if the rent was not distributed to the verified lenders.”
There are plans to pay off the fees
In June 2021, the National Company Law Tribunal (NCLT) approved Jet’s insolvency resolution plan, allowing the recovery process to resume. In December, Jet appealed to the relevant authorities to speed up the debt repayment process.
The carrier again approached the NCLT and notified December 22, 2021 as the “effective date” when they want to start implementing the plan.
The airline plans to repay its fees in the next few years. Photo: Getty Images
ET says the Jalan-Kalrock consortium, which won the Jet bid, has offered a staggered payment of about $47 million. They include about $23 million in an upfront payment and $24 million over two years after the plan is implemented. Lenders will also receive a 9.5% stake in the airlines. But they are also entitled to some payments from the sale of property owned by Jet Airways.
Jet has asked for about a week to respond to lenders’ demands regarding the aircraft lease.
The carrier said it plans to begin operations later this year, possibly in September. It got its own AOC in May and is now looking to finalize the aircraft deal for future operations.
It is hoped that the airline can resolve its financial problems and reach an agreement with creditors for a successful restart this year.
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Source: The Economic Times
https://simpleflying.com/jet-airways-insolvency-threats/ Jet Airways faces the threat of insolvency from creditors