Jalan-Kalrock’s plan for Jet Airways unworkable, lenders tell Supreme Court

The lenders, led by State Bank of India (SBI), told the Supreme Court on Monday that the Jalan Kalrock alliance’s approved decision plan for Jet Airways had become “unworkable” and “unworkable”. The banks received nothing from the consortium and did not inject money into the airline to jumpstart its operations.

After the consortium’s proposal to take over the bankrupt airline was approved by the National Company Law Tribunal (NCLT) on June 22, 2021, it has spent nearly Rs 400 crore of public money, including airport dues, Additional Solicitor General N Venkataraman, who represents the lenders. , before the court led by Chief Justice D. Y. Chandrachod.

While the employees want to clear their dues, the lenders want the consortium to deposit some money to prove good faith. The Supreme Court sought responses from the Jalan Kalrock consortium, and Ashish Chaucharya, representative of the Airline Oversight Committee, to the two appeals from the lenders and the Jet Maintenance Engineers Welfare Association.

The lenders have filed a challenge to a May 26 National Corporate Law Appeals Court (NCLAT) order that gave Jalan Kalrock’s consortium an additional three-and-a-half months to make the payments. NCLAT also asked lenders not to invoke the consortium’s Bank Guarantee (BG) that was offered at the time of bid submission, stating that banks should focus on reviving a company undergoing bankruptcy proceedings rather than penalizing a successful bidder for a fallout.

NCLT last December asked the lenders to turn Jet Airways over to the consortium. It asked the consortium to file Rs 185 crore – as decided under the insolvency resolution plan – with the lenders by May 14 this year so that the transfer of ownership can start. The lenders have not received this amount yet.

As per the resolution scheme, JKC was required to deposit with the lenders a Performance Bank Guarantee (PBG) of Rs 150 crore in two tranches: the first of Rs 47.5 crore when a settlement plan is approved by a committee of lenders and the second tranche of Rs 102.5 crore. crore on the Effective Date when all CPs (pre-conditions) have been met.