The new owners of Jet Airways desire to initiate a Follow on Public Offer for restoring minimum public shareholding as per the resolution plan mentioned in the written order of NCLT. The consortium of Murari Lal Jalan and Kalrock capital has proposed to issue 1 equity share for every 100 shares held by the public shareholders of Jet airways. The consortium will invest a maximum sum of Rs. 600 crore in the equity of the airline which will give them an 89.79% stake in the company. Hence, the public shareholding will be reduced to about 0.21% and financial creditors will hold 9.5% and workmen and employees will hold 0.5% stakes as per the resolution plan. The new owners aim to gain a public shareholding to at least 10% within a maximum period of 18 months and eventually to 25% within a period of 3 years. However, the SEBI rules of 2020 for the listed companies going through CIRP mentioned gaining public shareholding of 10% within 12 months and 25% within 36 months.
The successful resolution applicant’s demand to initiate the FPO must be in consonance with the law. The Consortium of Murari Lal Jalan and Kalrock Capital was approved by NCLT with a few riders. The consortium was asked to take permission of the Directorate General of Civil Aviation within 90 days. The tribunal also affirmed that the Airways has ceased operations prior to initiation of the insolvency, hence the insolvency law pertaining to cancellation of existing government licenses, concessions will not be applicable to it.