IBC: Office Space Lessor Luckystar, Jet Airways Working On A Settlement
Luckystar earlier moved the NCLT to take back its property after the carrier failed to make payments.
Jet Airways (India) Ltd. is working on a settlement with the owner of the building that houses its corporate headquarters in Mumbai and is also seeking the government’s help to repatriate deposits in Bangladesh to pay employee salaries.
Luckystar Property Holdings and Jet Airways have been working on a solution beneficial for both the parties, Janak Dwarkadas, counsel representing the real estate lessor, informed the National Company Law Tribunal today. The airline proposed that it will vacate the leased head office space and move to a different premises, he said, adding that Luckystar proposed that it will consider refunding part of the security deposit that it has taken over against unpaid amount, he said.
Luckystar earlier moved the NCLT to take back its property after the carrier failed to make payments. The airline, with a debt of about Rs 10,000 crore, was grounded after it didn’t pay aircraft lessors, employees and lenders.
The NCLT, which initiated its insolvency proceedings after lenders invoked the bankruptcy law, on June 20 allowed a moratorium against legal action and recovery of dues. But Luckystar set-off Rs 10 crore security deposit against Jet Airways after it failed to pay license fees for May and June.
Payment Of Salaries
An association representing Jet Airways’ employees, including pilots and engineers, had moved the NCLT in June seeking recovery of their salary dues. The tribunal then asked the resolution professional to discuss the matter with the Committee of Creditors.
The resolution professional, Ashish Chhawchharia, informed the NCLT today that the CoC held discussions to raise funds to pay employees through current receivables or assets. This, he said, will help maintain the going-concern status of the carrier.
Jet Airways has cash in a bank in Bangladesh which is stuck outside India due to foreign exchange remittance issues, he said, adding that the airline is seeking the government’s intervention to repatriate that money back to pay salaries. The resolution professional didn’t disclose the deposit amount.
Jet has around 7,400 employees on its payroll but hasn’t generated operational revenue since April after halting flights.
The NCLT will next hear the matter on Aug. 28.