Jalan-Kalrock Consortium (JKC), the successful bidder of bankrupt Jet Airways, on Friday sought more time before the National Company Law Appellate Tribunal (NCLAT) to pay Rs 350 crore to the lenders of the airline.

The payment date was earlier fixed for August 31, but JKC has now sought an extension. The appellate tribunal directed JKC to file an application stating the revised schedule of payments within 24 hours and posted the matter for August 21.

Senior advocate Ravi Shankar Prasad, appearing for JKC, informed the court that the union would deposit Rs 100 crore by August 21, Rs 100 crore by the end of September and since it has already promised to give a bank guarantee of Rs 150 crore, Hence it is enforceable by the lenders.

JKC also assured the tribunal of its commitment to resume airline operations.

On the other hand, Additional Solicitor General N Venkataraman, representing the lenders including State Bank of India (SBI), said that the investment of Rs 350 crore is the first step towards clearing the dues. He informed that after this initial payment, the lenders will have to pay three more tranches of money, with the last step being the transfer of equity shares.

Challenging JKC’s contention, Venkataraman said the bank guarantee of Rs 150 crore cannot be considered part of the Rs 350 crore payment, as it was executed for a separate clause of the resolution plan.

On May 26, the NCLAT granted JKC 107 days to pay the lenders’ share.

“The SRA (successful bidder, i.e., JKC) is ready and willing to put up the first tranche of Rs 175 crore, and to demonstrate the authenticity of the SRA, it will put up Rs 50 crore within 30 days and the rest within the agreed time frame. ” Order noted.

The court directed that till this time (107 days, till August 30) the bank guarantee of Rs 150 crore should not be paid by the State Bank of India (SBI).

JKC was earlier allotted 180 days from November 16, 2022 to May 15, 2023, to pay dues to lenders.

The court said, “Having considered the facts and sequence of events in the present case, we are of the view that the SRA is entitled to exclude the period from November 16, 2022 to March 3, 2023, when this Tribunal was in present appeal passed an order rejecting the interim relief as prayed by the creditors.

This means that JKC has obtained an extension of over three months to deposit dues to lenders as 107 days were excluded from the 180-day period.

NCLAT issues order on JKC’s application restraining SBI from invoking the guarantee. The public sector lender had told the tribunal in an earlier hearing that JKC has not paid the dues due on May 15.

JKC informed the court that on May 13, it received a letter from SBI, requesting it to give the amount mentioned in the letter. SBI’s letter details the identified bank account and warns that if payment obligations are not met by May 15, the lender will exercise its rights and remedies under law, including invoking performance bank guarantees. can use.

The court said that instead of invoking performance bank guarantees, the lenders should take steps to assist in the implementation of the resolution plan and achieve its objective. “The resolution plan is approved with the intent and object of reviving the corporate debtor (Jet Airways),” the court said.

Jet’s air operator’s certificate (AOC), which was revalidated by India’s aviation regulator on May 20 last year, expired on May 19, indicating that the airline is unlikely to start commercial flights in the near future. Till May last year, JKC had deposited Rs 150 crore with lenders in the form of Performance Bank Guarantee (PBG).

The National Company Law Tribunal (NCLT) had last December directed the lenders to hand over Jet Airways to the consortium. It asked the consortium to deposit Rs 175 crore as agreed under the insolvency resolution plan with the lenders by May 14 this year to start the ownership transfer process.

As per the resolution plan, JKC was required to deposit PBG of Rs 150 crore with the lenders in two tranches: first tranche of Rs 47.5 crore upon approval of the resolution plan by the committee of creditors, and second tranche of Rs 102.5 crore on the “effective date”. When all the preceding conditions are fulfilled.

A refundable earnest money of Rs 15 crore was deposited with the lenders when JKC submitted its resolution plan in July 2020. The first performance bank guarantee tranche of Rs 47.5 crore was submitted in October 2020 upon approval of the resolution plan by the committee of creditors. The balance amount of Rs 87.5 crore was deposited in the second PBG tranche on May 20 last year, which was called the “effective date”, when all conditions were met.

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