Last Updated: July 1, 2021
The revival plan for Jet 2.0 will require the new successful resolution applicant (SRA) London-based Kalrock Capital and UAE businessman Murari Lal Jalan to infuse Rs 350 crore within 180 days, followed by another Rs 250 crore in the next six months i.e. a total Rs 600 crore in the first year.
This will need to infuse through ECBs of Rs 175 crore in the second year, followed by another Rs 600 crore later on. Overall, the SRA has proposed a total cash infusion of Rs 1,375 crore.
Settlement of claims from this amount made on Jet 1.0 will be limited to Rs 475 crore. While Jet’s financial creditors had raised total claims of Rs 7,808 crore, the consortium has proposed to pay Rs 385 crore to them — 95% less.
While it raises hope for the airline to fly again, it does not have much good news for Jet-1 employees as of now. “Corporate Debtor (Jet-1) currently has large number of employees and workmen on its payrolls, who are otherwise not required for the day-to-day affairs. Hence the resolution professional did not account the salaries and other benefits due to such employees (estimated at about Rs 715 crore as of September 2020) as corporate insolvency resolution process cost,” the NCLT’s order states.
The SRA’s proposal for the employees, that awaits approval, includes creating a welfare trust that will get 0.5% equity stake in the revived airline.
Cash payment for employees: SRA proposes to pay a token sum of Rs 11,000 in cash to each employee of (Jet-1); Rs 5,100 cash as medical expense reimbursement for the parents of the workmen; Rs 5,100 as school fee reimbursement for children of workmen; Stationary (notebooks, school bags etc.) valued at Rs 1,100 for children of the workmen (and) one-time mobile phone recharge of Rs 500 for workmen.
These cash payments “will be made out of the contingency fund (Rs 8 crore) reserved by the SRA. Additional amounts, if required, will be utilized out of the proceeds of sale of assets,” the order said.
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