Jet Airways Insolvency: Defunct airline to vacate former HQ Siroya Centre in 45 days

Jet Airways Insolvency: Defunct airline to vacate former HQ Siroya Centre in 45 days

Omkar Gokhale

The National Company Law Tribunal (NCLT), Mumbai was informed on Wednesday by the Insolvency Resolution Professional (IRP)  overseeing the Jet Airways insolvency proceedings that a settlement may soon be reached between the grounded airline and Luckystar Private Limited over the possession of the Siroya Centre.

Owned by Luckystar, the Siroya Centre housed the Jet Airways Headquarters at Andheri. Last month, Luckystar  had approached the NCLT seeking directions for the eviction of the IRP and Jet Airways from its premises.

On Wednesday, IRP Ashish Chhawchharia said that the defunct airline will vacate the premises of Siroya Centre within 45 days and that he will file a written application before the NCLT in that regard.

A Division Bench of judges VP Singh and Rajesh Sharma has been hearing the insolvency proceedings against Jet Airways. On August 8, the NCLT gave twenty days to Luckystar and the IRP to reach an amicable settlement over the possession of the property.

Luckystar had claimed that the IRP is a trespasser for using the premises, despite the lease being terminated on June 7, after Jet Airways failed to pay rent. The IRP had sought for Luckystar to refund a security deposit worth Rs 10 crore.

Appearing for Luckystar, senior counsel Janak Dwarakadas had told the NCLT that there is a consensus with the IRP on a few points related to the Siroya Centre. Following discussions with the Jet Airways IRP, Dwarakadas said,

We have agreed on a few things such as Jet Airways can get security deposit partially refunded and the airline can get 30 days to vacate Siroya Centre. We will try to get a final solution.”

On August 8, the court was also told that the Committee of Creditors ( CoC) is likely to approve the compromise plan on the Siroya centre in two weeks. On Wednesday, IRP Chhawchharia informed the NCLT that following a meeting held earlier this week, the CoC has broadly agreed to the settlement terms put forth by Luckystar.

Moreover, IRP Chhawchharia also informed the tribunal that the deadline for submission of the Expression of Interest (EOI) has been extended till August 31, since the South American Synergy Group, an owner of Avianca Airlines has sought time.

Chhawchharia submitted that so far, two parties have been provisionally shortlisted as eligible resolution applicants. Apart from Avianca Airlines, Russian Fund Treasure RA Creator is the other entity that has been provisionally shortlisted.

Earlier, the Court was told that the date of submitting Expression of Interest (EOI) for Jet Airways has been changed to August 10 from August 3. Consequently, all other proceedings were expected to get delayed. Chhawchharia had also informed the NCLT earlier this month that efforts are being made to recover the receivables of Jet Airways to settle a part of the employees’ salary and other dues.

Around Rs. 70 Crores is  stuck in Bangladesh due to remittance issues,” Chhawchharia submitted on Wednesday.

On July 23, the NCLT had directed the IRP to discuss employees’ salary payment issues with Committee of Creditors (CoC). While seeking more time to pay the salaries of Jet Airways employees on August 8, the IRP had informed the NCLT that a total 7,400 employees are currently on the payroll of Jet Airways.

Of these employees, around 200 were approached for providing pro-term funding. Out of them, 135 have agreed for such an arrangement, it was submitted. The tribunal was further informed that currently, the grounded airline has no revenue generated from operations and employee salaries remains a concern requiring more time to address.

Last month, HDFC also moved a plea before the NCLT, Mumbai claiming that 3 floors of the Jet Airways office in the Bandra Kurla Complex (BKC) are mortgaged in its favour and cannot be part of the resolution plan. The proposal will be made to the CoC on claims made by mortgage lender HDFC.

Jet Airways owes over Rs. 8,000 crores to lenders, including consortium of banks led by the State Bank of India. The grounded airline also has a large debt by way of accumulated losses to the tune of Rs. 13,000 crore and vendor dues of over Rs. 10,000 crore, apart from salary dues of over Rs. 3,000 crores.

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