On June 11, the Principal Bench of the National Company Law Tribunal (NCLT) allowed the lenders to go ahead with the monetization plan for about 1.70 lakh square feet saleable area that comprises of 3rd and 4th floor of building ‘Jet Airways Godrej BKC’. The asset also includes rights to use parking space for about 140 cars.
The lenders have kept the reserved price of Rs 490 crore for the property and the auction for the same is expected to take place on June 26.
“The proceeds from the proposed sale of premises will be utilized for the clearing residual dues remained payable to one Export-Import Bank of the United States over the finance lease created on six aircraft of corporate debtor (Jet Airways) and to HDFC over the security interest created in favour of it,” said the six-page order.
According to the order, US Exim holds a charge over six aircraft of which cumulative depreciated value is over $200 million. “If the amount payable to US Exim is not paid, US Exim will become entitled to repossess the six aircraft,” said the order further adding that the US Exim bank has agreed that upon the payment of $13 million (about Rs 90 crore), it will transfer the title of six aircraft to the corporate debtor.”
With this development, Jet Airways can add six aircraft in its fleet worth around Rs 1,400 crore, which will help its prospects for better bidders, people aware of the development said.
As per the bid document, the interested parties will have to submit earnest money of Rs 25 crore by June 24 along with the bid documents. The lenders had approved the sale of this premise with 74.45% voting.
“The steps taken by the CoC appears to be a workable solution in the absence of any provisions on cross border insolvency to get the charge on aircraft released from US Bank,” said Ashish Pyasi Associate Partner Dhir & Dhir Associates. “The proposed auction of one of the immovable properties of Jet Airways is unparalleled because the proceeds of this auction will be used for clearing the dues of HDFC Bank the charge on immovable property and Export-Import Bank of US so that the charge of US bank on the aircraft will be released.”
The Resolution Professional (RP) has received claims of about Rs 37,000 crore, less than a third of which came from financial creditors.
“This was planned for the value maximisation and benefit of all the stakeholders,” said Ashish Chhawchharia, the head of Grant Thornton India’s restructuring practice and the RP for Jet Airways.