The legal counsel of the resolution professional (RP) for Jet Airways on Thursday informed the National Company Law Tribunal (NCLT) that paying salary dues of the employees remains a concern since the airline has no income from operations at present.
Some of the pending receivables of over Rs 50 crore could be used to settle part of the salary dues. The RP has also sought the permission of the committee of creditors (CoC) to liquidate some assets, its counsel told the bench. These assets would include receivables from ticket sales, which are due to the company. Last month, the tribunal directed the resolution professional of Jet Airways to discuss concerns over payment of salaries with the CoC, citing the need to ensure payment for the “survival of employees”. In the last meeting of the CoC, lenders expressed their inability to provide additional funding for settling salary dues. At present, Jet Airways has around 7,400 employees on its payroll. The RP’s legal counsel also informed the tribunal that about 200 employees have been asked to continue working with the airline for maintenance operations on a pro tem basis, of which 135 have so far agreed.
The RP also submitted its fortnightly progress report on the resolution of Jet Airways to the tribunal on Thursday.
In the matter of the office of Jet Airways at the Siroya Centre (in Andheri), the counsel informed the NCLT that Luckystar, the owner of the property, and the RP are trying to reach an-out-of-court settlement.
Luckystar had approached the tribunal last month seeking to repossess Siroya Centre, the six-storey building which was the headquarters of Jet Airways, after its lease expired on June 7. The legal counsel of both parties informed the tribunal that the settlement includes some conditions, which have to be deliberated upon by the (CoC) of Jet Airways over the next two weeks. The conditions include partial refund of the security amount deposited with the property owner, and Jet Airways vacating Siroya Centre and shifting its office to Bandra Kurla Complex, Mumbai.
HDFC Bank had also approached the tribunal last month seeking to keep the Godrej BKC, a property developed by Godrej Properties in partnership with Jet Airways, out of the bankruptcy proceedings. Part of the property was initially mortgaged with the bank and has since been conveyed in its favour. HDFC Bank’s legal counsel informed the tribunal that the bank will place terms for an out-of-court settlement in the matter before the CoC soon. The NCLT will hear both matters on August 28.
Jet Airways halted operations on April 17 after lenders refused to provide emergency funding. After failed attempts at selling the airline, SBI, one of Jet’s largest lenders, moved the tribunal to initiate bankruptcy proceedings in June.