JKC gets time till Sept-end to pay Jet Airways lenders Rs 350 crore dues

Tribunal also allows adjustment of Rs 150 cr as payment by invoking Jalan Kalrock's performance bank guarantee

The National Company Law Appellate Tribunal (NCLAT) on Monday gave Jalan Kalrock consortium (JKC), the successful bidder for Jet Airways, time until the end of September to pay Rs 350 crore as dues to the airline's lenders.

The tribunal also allowed the adjustment of Rs 150 crore as payment by invoking JKC’s performance bank guarantee (PBG). The consortium has to pay Rs 100 crore by August 31 and another Rs 100 crore by September 30. The case is likely to come up again on October 4.

Payment was due on August 31 but JKC sought an extension. NCLAT had earlier instructed JKC earlier to file an application, stating the revised schedule of the payment.

Senior advocate Ravishankar Prasad, who appeared for JKC in earlier hearings, had told the tribunal that the consortium would deposit Rs 100 crore by August 31  and another Rs 100 crore by the end of September.

Since it has already pledged a bank guarantee of Rs 150 crore, this could be invoked by the lenders, Prasad said. 

However, the lenders had argued that the PBG of Rs 150 crore is a back-up and cannot be invoked at this stage. They said that while they may consider extending the deadline to pay the dues, they object to encashing the bank guarantee.

The lenders also questioned how JKC would pay some Rs 7,000 crore as dues to them when it is struggling to pay Rs 350 crore.

JKC told the tribunal it is committed to resuming the airline.

In the last hearing, Additional Solicitor General N Venkatraman, representing the lenders, including State Bank of India (SBI), had countered that the infusion of Rs 350 crore is merely the first step towards payment of dues.

He added that after this initial payment, three more tranches of money are to be paid to the lenders, with the final step being the transfer of equity shares.

Challenging JKC’s argument, Venkatraman stated that the bank guarantee of Rs 150 crore cannot be considered a part of the Rs 350-crore payment, as it was executed for a different segment of the resolution plan.