India's PNB asks tribunal to quash Jet Airways' rescue plan

Jet Airways (India)

02/09/2021 13:09

By Aditya Kalra and Abhirup Roy
    NEW DELHI, Sept 2 (Reuters) - India's Punjab National Bank
 PNBK.NS  on Thursday urged a tribunal to quash the rescue plan
for defunct debt-laden Jet Airways  JET.NS , alleging
irregularities in it, a move that risks delaying any return of
the airline grounded two years ago.
    A consortium of London-based Kalrock Capital and a UAE-based
businessman last year agreed to pump in 10 billion rupees as
working capital and give funds to creditors of Jet, which was
hit hard due to piling up debt in 2019.
    PNB, the court-appointed official in charge of Jet's
revival, Ashish Chhawchharia, and a spokesperson for the
consortium investing funds into the collapsed airline did not
respond to requests for comment.
    The country's second-largest state lender PNB argues that
Jet's court-appointed rescue official had initially accepted its
claim of nearly 10 billion rupees ($137 million) from the
airline's backers, but then reduced it by 2 billion rupees,
according to its tribunal filing seen by Reuters.
    At the National Company Law Appellate Tribunal, PNB argued
that a reduction of the amount was arbitrary and illegal.
    On Thursday, the tribunal agreed to hear PNB's case, 
Additional Solicitor General of India, Aman Lekhi, who argued
for the bank, told Reuters. The case will be heard on Sept. 21. 
    "How PNB has been treated is wrong - both substantively and
procedurally," Lekhi said.
    Once India's biggest private carrier, Jet Airways was
crippled by losses and a pile of debt as it attempted to compete
with low-cost rivals and was forced to ground all flights in
April 2019, putting at risk https://www.reuters.com/article/jet-airways-debt-workers-idUSL3N21X2V4
 its lessors, suppliers, lenders and thousands of employees. 
    Jet's resolution plan was approved last year by its
financial creditors. PNB has maintained that since the
resolution plan mandated only minimum payment of liquidation
value for dissenting creditors it was left with no choice but to
approve the plan.  urn:newsml:reuters.com:*:nL4N2H806C urn:newsml:reuters.com:*:nL3N2O42F1
    

 (Reporting by Aditya Kalra and Abhirup Roy; editing by David
Evans)
 ((abhirup.roy@thomsonreuters.com; + 91 22 6180 7067; Reuters
Messaging: abhirup.roy.thomsonreuters.com@reuters.net))