MUMBAI - Creditors of India's Jet Airways and the company's new owners are deadlocked over a resolution plan to pull the airline out of bankruptcy, putting the carrier's future in limbo, according to sources.
Creditors may approach India's aviation ministry to seek approval to liquidate Jet's assets if a resolution does not emerge during a critical court hearing on Tuesday, said a senior banker.
"There have been too many delays ... there are concerns the resolution plan may fall apart so we are looking to see if we can at least get something out of this deal via the liquidation route," the banker, who has direct knowledge of the matter, said.
The resolution plan is binding upon all involved parties and was approved by the bankruptcy court, a spokesperson for Jet's new owners said in a statement.
We are "working closely" with the erstwhile lenders of Jet to implement this plan, and remain "fully committed" to getting Jet Airways off the ground, it added.
State Bank of India, the lead lender in the consortium of creditors, declined to comment. The court-appointed resolution professional overseeing the case did not immediately respond to an email request for comment.
Once India's biggest private carrier, Jet stopped flying in April 2019 after running out of cash and was taken to a bankruptcy court by creditors who were owed about 180 billion rupees ($2 billion).
Last June, a restructuring plan was approved by the National Company Law Tribunal (NCLT) and the airline was set to resume operations by the first quarter of 2022 under its new owners - a consortium including London-based Kalrock Capital and UAE-based businessman Murari Lal Jalan.
However, disagreements between the company's new owners and lenders over the plan risks derailing Jet's recovery.
Lenders believe Jet needs around 10 billion rupees of capital to run its operations in full but it hasn't managed to bring that amount to the table, the banking source said.
"So far they have only shown that they have received 1.5 billion rupees worth of bank guarantees and around 200 million of cash which is not adequate to run the operations," he added.
Another source close to the airline, however, said Jet has fulfilled all the prerequisites of the resolution plan and the committee of creditors has also undertaken due diligence on the Jalan-Kalrock consortium's ability to inject funds.
The 10 billion rupees is to be injected into the carrier over a period of two years with 2.7 billion to be paid more immediately to banks and other creditors, the person added.
By not approving the resolution plan creditors are causing unnecessary delays, the source close to Jet said.
"The reason we are unable to trust the consortium (of Jet's new owners) is because we think they are not fully invested in the resolution plan," said a banker at another creditor bank.
"They don't seem to have much skin in the game, instead they want banks to do all the work," he added.
(Reporting by Nupur Anand in Mumbai and Aditi Shah in New Delhi; Editing by Susan Fenton)