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Business News/ Companies / News/  Now, Jet lenders ask JKC to produce flying permit
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Now, Jet lenders ask JKC to produce flying permit

Jet Airways' ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium

Jet Airways stopped flying in April 2019 after running into financial difficulties. (File Photo: AFP)Premium
Jet Airways stopped flying in April 2019 after running into financial difficulties. (File Photo: AFP)

New Delhi: Lenders to Jet Airways, led by State Bank of India, have asked the Jalan-Kalrock Consortium (JKC), the successful bidder for the airline, to present the necessary Air Operator Certificate (AOC).

The request for the AOC, a prerequisite for flight operations, was made during the hearing in a case at the National Company Law Appellate Tribunal (NCLAT), involving the airline's Committee of Creditors (CoC), which has contested the ownership transfer to JKC.

The lenders' insistence on the AOC highlights the conditions for restarting the airline. They expect JKC to present the certificate at the next hearing as a proof of their intent to revive Jet Airways.

In previous hearings, lenders had raised concerns over JKC's funding sources and alleged money laundering activities, particularly in connection with investor Florian Fritsch, who is under investigation for fraud by European entities.

The court has postponed the hearing to 11 December, emphasizing that no further delays will be tolerated, and the case will be prioritized on that date.

In July, the Directorate General of Civil Aviation (DGCA) had conditionally extended Jet Airways' AOC until 3 September, limited to facilitating the Corporate Insolvency Resolution Process (CIRP). JKC has claimed that the flying permit is in place and remains valid until the consortium initiates flight operations.

Additional solicitor general N Venkataraman, representing the lenders, conveyed the complexities of the case, citing JKC's continuous legal maneuvers, including their request for the return of a 200 crore deposit and simultaneous appeals for urgent hearing at the Supreme Court.

JKC has said that the funds are sought for equity issuance in the airline, an action not yet executed by the lenders.

On 29 September, JKC said it had fulfilled the financial commitment of 350 crore and the new promoters are determined to resume operations of the airline in 2024.

JKC had completed the transfer of money to the lenders as per NCLAT's directive instruction. According to the payment schedule, approved by the NCLAT on 28 August, JKC was required to pay 200 crore to the lenders. The NCLAT had instructed them to pay the due amount of 350 crore by 30 September, with 150 crore to be encashed from the performance bank guarantee. 

However, lenders voiced concerns about the consortium's source of funding, hinting at potential money laundering on 4 October.

Jet Airways stopped flying in April 2019 after running into financial difficulties. However, ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium. On 22 June 2021, the NCLT approved the resolution plan for Jet Airways.

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Published: 22 Nov 2023, 06:08 PM IST
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