Jet Airways case: NCLAT grants extension to Jalan Kalrock Consortium for Rs 350-crore payment

The case will now come up on October 4.

The National Company Law Appellate Tribunal (NCLAT) on August 28 granted extension of time to Jet Airways' successful resolution applicant, the Jalan Kalrock Consortium, to make the payment of Rs 350 crore to its lenders.

Accepting the consortium's request, the NCLAT has given time up to September 30 to make the payments.

The appellate tribunal has also permitted an adjustment of Rs 150 crore from an existing performance bank guarantee towards the Rs 350-crore payment. The case will now come up on October 4 for further consideration.

As per the consortium's undertaking, they will pay Rs 100 crore by August 31, Rs 100 crore by September 30, and the remaining Rs 150 crore will be adjusted from an already existing performance bank guarantee.

Jalan Kalrock Consortium told the court that they would deposit Rs 100 crore by August 31 and another Rs 100 crore by September 30. The consortium urged the Committee of Creditors (CoC) to encash a performance bank guarantee (PBG) of Rs 150 crore towards the remaining amount.

The CoC of Jet Airways had argued that the performance bank guarantee was a back up and cannot be utilised at this stage. They told the appellate tribunal that while they may consider extension of time till September 30 for the deposit of Rs 350 crore, they are objecting to the bank guarantee being encashed.

On August 18, when the consortium proposed the payment schedule, the appellate tribunal asked it to file an application to this effect in 24 hours.

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 the 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.