After a three-day hearing on JetAirways (9W, Mumbai International) India’s National Company Law Tribunal (NCLT) has reserved its decision after the airline’s owners, the Kalrock Capital-Murari Lal Jalan consortium, sought orders to compel a consortium of lenders to allow the consortium’s takeover of the airline to complete.

Krishnendu Datta, speaking for the consortium in the State Bank of India (SBI) vs. Jet Airways India Limited matter in Mumbai this week, said the lenders, led by the SBI, want to change a resolution plan agreed by all parties and by the NCLT approved in June 2021. However, the lenders’ lawyer said the consortium is also trying to change the plan in relation to agreed payments and make commitments to meet them.

The lenders, who came out of pocket from the 2019 Jet Airways collapse, want assurances from the Kalrock Jalan consortium that the deferred payments will be paid in full, according to the resolution plan. At stake is INR 5.86 billion (US$70.6 million) in future payments – just 5% of the amount Jet Airways owed lenders when it collapsed. The loan syndicate’s lawyer said his clients had doubts they would receive even that amount if no commitments were made.

However, Datta told the court that the resolution plan could not be adjusted to the lender’s changing desires. “Now they want to change the contours of the financial plan,” he said. “Eight months after the deadline (May 20, 2022), lenders are suddenly dissatisfied. Now they want extra funds. This is totally unacceptable and contrary to the resolution plan.”

Meanwhile, India’s Financial Express reports on the bank guarantees and collateral given to the loan syndicate in relation to some previously due payments. Two commercial properties in Dubai, one in Jebel Ali Industrial First and the other in Al Quoz, have been included in the resolution plan as security for two payments due from the consortium, the first for INR 1.85 billion (US$22.3 million) and the second for INR 1.95 billion (US$ 23.6 million). Both properties were valued at over INR 1 billion (US$12.1 million) each and were made available to the loan syndicate with a fifth year release date.

The lenders also gained control of a third Jet Airways property in the Bandra Kurla Complex in Dubai, however this transaction was outside of the formal wind-up plan and was not officially considered collateral. Nonetheless, according to the Financial Express, this property is valued at around INR 500 million (US$ 6 million). The third property has been given the same release date conditions.

The amount of the bank guarantees is not known, but the loan syndicate is seeking further commitments from the Kalrock Jalan consortium. But her lawyer told the tribunal the consortium’s refusal and that refusal supersedes the resolution plan.

However, Datta told the court that any change to the plan would violate Section 31 of India’s Insolvency and Bankruptcy Code 2016. “The moment I agree to such a commitment, I would be violating the plan. The lender’s behavior leaves much to be desired,” he said.

Meanwhile, legal wrangling over money prevents Jet Airways from restarting. The airline’s new owners have a valid Air Operator’s Certificate, but slot allocation has been lost due to restart delays and fleet decisions remain unresolved. Jet Airways intends to restart with just six B737s before expanding to 111 aircraft by its fifth year of operation.