Jet Airways case: JKC to deposit Rs 200 crore as Bonafide by September 30 to lenders

Jet Airways

Jalan Kalrock Consortium (JKC), the successful resolution applicant of grounded airline Jet Airways, on August 19 sought an extension of time at the National Company Law Appellate Tribunal (NCLAT) to make the Rs 350-crore payment that the Committee of Creditors (CoC) demanded that they pay to show bonafide.

The CoC had asked the money be paid by August 31, but JKC has now sought a different schedule. The NCLAT has asked JKC to file an application stating their stand in 24 hours and posted the case for hearing on August 21.

During the hearing today, senior advocate Ravishankar Prasad appearing for JKC argued that they will deposit Rs 100 crore by August 31 and another Rs 100 crore by September 30. According to JKC, there is a bank guarantee lying in favour of the CoC that can be encashed to total the Rs 350-crore demand.

JKC demanded the CoC to ensure that the ownership of the airline to the maximum extent possible. He informed the appellate tribunal that JKC is committed to resuming Jet Airways operations.

Appearing for the CoC, Additional Solicitor General N Venkatraman argued that the infusion of Rs 350 crore is only the first step towards the transfer of equity shares. He informed the court that JKC will have to undertake many other tasks before the equity shares are transferred.

According to Venkatraman, the bank guarantee of Rs 150 crore was executed for some for the resolution plan and it cannot be construed to be a part of the Rs 350 crore that the CoC asked JKC to pay.

Jet Airways employees also informed the tribunal that the consortium owes them their dues as well.

JKC's application for extension is expected to be heard on August 21.

On August 7, the CoC told the appellate tribunal that they may choose not to pursue the appeal against the transfer of the airline's ownership to Jalan Kalrock Consortium if it pays Rs 350 crore towards fulfilling condition precedents.

On July 10, the CoC told the Supreme Court the airline be wound up as the resolution plan approved by the NCLT was not workable.

A committee of creditors is formed once a company is admitted to insolvency. It is a body of financial creditors that represents the interest of stakeholders. The voting percentage in the panel is proportional to the amount a financial institution has lent to the company in insolvency.

On January 13, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan. However, the CoC took it to NCLAT opposing the transfer.

Jet Airways was grounded in April 2019 over growing losses and a debt of about Rs 8,000 crore. In October 2020, the airline's CoC approved the revival plan submitted by the Jalan-Kalrock consortium.