Jet Airways’ Committee of Creditors Monday informed the National Company Law Appellate Tribunal that they were ready to grant a month’s extension for payment of Rs 350 crore but differed on the terms of payment suggested by the Jalan-Kalrock Consortium.
“How do we reach the end of the long tunnel of (recovering) Rs 7,800 crore if we are struggling for Rs 350 crore,” the senior counsel representing Jet CoC, led by the State Bank of India, told the tribunal.
The JKC has been arguing for an adjustment of Rs 150 crore performance bank guarantee, along with a payment of Rs 100 crore done by August 31 and another Rs 100 crore by September 30.
The bench wanted the JKC senior counsel to satisfy if the performance bank guarantee could be used as a security for the Rs 350 crore to be deposited by August 31. NCLAT order on the extension and performance bank guarantee issue is reserved for August 28.
The JKC senior counsel, in his arguments, noted that the consortium was serious about operating the airline but questioned the lenders’ seriousness of the matter.
“This is not a fair attitude from a public authority,” the senior counsel for JKC stated, implying that the CoC was leaning towards liquidation.
The counsel cited the resolution plan approved by the tribunal to indicate that the performance bank guarantee of Rs 150 crore, which was earlier of Rs 47.5 crore, could be adjusted in lieu of security.
However, the senior counsel for CoC argued that specific conditions were laid down in the resolution plan for adjustment of PBG, which entailed the sale of BKC, Mumbai, property, which hasn’t happened to date.
CoC further argued that the JKC was asking for not just an extension “but a modification of the plan”.
The JKC counsel said that the CoC was already in control of the BKC property in Mumbai.
The JKC counsel further contended that the CoC should at least start the process of transfer of ownership of the airline and wanted the tribunal to direct the CoC to complete the process of change of board of directors and extinguishing past shareholders within 15 days of payment of Rs 350 crore by September 30.
The CoC argued that they had incurred Rs 390 crore to date as expenses for maintaining the airline and incurring additional expenses of Rs 22 crore monthly.
The counsels for workmen argued that JKC be asked to pay Rs 224 crore in dues to workmen, including pension and gratuity payments.
JKC said that it would make the pension payments but would need to make provisions for gratuity and wanted the tribunal to grant an extension for gratuity payments.
The tribunal has asked both parties to file written submissions within three days.
JKC won the bid for running Jet Airways in 2021. It successfully renewed the air operator’s certificate from the civil aviation regulator Director General of Civil Aviation earlier this month.
The consortium owns 11 aircraft and has contended that the CoC has been creating hindrances to resume operations.
