Lenders to Jet Airways (India) Ltd approved on Saturday a resolution plan to revive the airline that was grounded one-and-a-half years ago.
The Committee of Creditors cleared the plan submitted by the UK-based Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan, the airline said in a stock-exchange filing.
Ashish Chhawchharia, Jet’s insolvency resolution professional, will now seek approval for the plan from the National Company Law Tribunal. The consortium will also need clearance from the aviation and corporate affairs ministries.
The airline said its lenders, led by State Bank of India, discussed two resolution plans and voted for the Kalrock-Jalan consortium. It didn’t disclose details of the resolution plan.
The second bid was from Flight Simulation Technique Centre, founded by Haryana-based pilot-turned-entrepreneur Sanjay Mandavia; Mumbai-based Big Charter and Abu Dhabi’s Imperial Capital Investments LLC.
Both the resolution plans required banks to take a haircut of over 95%. In its resolution plan, the Kalrock consortium had proposed to restart the airline with 27 wide-bodied aircraft.
Previously, Canadian entrepreneur Siva Rasiah and Kolkata-based Alpha Airways had shown interest in acquiring the airline but didn’t submit any bids. South America-based Synergy Group, Prudent Asset Reconstruction Company and the Russian government-backed Far East Development Fund had also expressed interest in buying Jet Airways.
Kalrock Capital was founded by European entrepreneur Florian Fritsch, and operates in financial advisory and alternative asset management segments. Dubai-based Jalan has investments in diverse sectors like real estate, mining, trading, consumer goods across the UAE, India, Russia and Uzbekistan.
Jet Airways
Once India’s biggest private airline, Jet Airways halted its operations on April 17, 2019 due to an acute cash crunch.
In June last year, the NCLT’s Mumbai bench admitted an insolvency plea filed by SBI on behalf of a consortium of 26 banks.
Over the last few months, the airline received multiple extensions to find a buyer under the insolvency process.
Jet owes more than Rs 8,000 crore ($1.08 billion) to banks and is facing claims of Rs 24,887 crore from various creditors including banks, suppliers and employees. The NCLT has admitted claims worth Rs 14,000 crore.
While under insolvency, Jet Airways’ slots at major airports and its traffic rights were awarded temporarily to other airlines. Its operating permit is dormant and would need to be made active and licences of pilots and engineers would need to be renewed.
The airline was founded by businessman Naresh Goyal, who is now under the scanner of various government agencies for alleged mismanagement and diversion of funds related to Jet.
