Jet Airways zooms after NCLT nod for ownership transfer to JKC

Jet Airways stock has surged 14% in three trading sessions after the National Company Law Tribunal (NCLT) allowed the ownership transfer of the bankrupt airline to the winning bidder, Jalan-Kalrock Consortium (JKC). Jet’s stock, which was trading at around Rs 70 apiece on January 12, has surged to around Rs 80. However, it is still down nearly 40% from its peak of Rs 131 recorded last year.

The Mumbai-based low-cost airline has been in the midst of a bitter fight between State Bank of India-led lenders and JKC over the past few months on whether the latter has met the conditions it had proposed to take over Jet.

The NCLT on Friday ruled that the winning bidder can be handed over the airline and will be granted six months starting November 16, 2021, to pay back the banks that have lent the airline around Rs 8,000 crore. As per the resolution plan, JKC should make cash payment of Rs 185 crore to financial creditors within 180 days from this effective date. The lenders, however, opposed the ruling in the same hearing and sought a two-week stay, which was declined by the court.

Besides the conditions being met, the lenders' consortium had asked JKC-appointed Sanjiv Kapoor to stop using the designation of “CEO, Jet Airways” as the company has still not been transferred.

The consortium, has in turn, shot back a letter defending Kapoor. “Sanjiv Kapoor, who received necessary security clearance from the honourable Ministry of Civil Aviation, govt of India, in August 2022, is the CEO-designate for Jet Airways and thus requires no further approval from any statutory authority,” JKC said.

The lenders now have the right to approach the National Company Law Appellate Tribunal (NCLAT) to challenge the NCLT verdict.