KHALEEJ TIMES, Sunday October 18, 2020 / 1 , Rabi' al-awwal , 1442
Consortium of UAE investors comes to Jet Airways’ rescue
Emirates:
A consortium comprising a UAE-based entrepreneur and Kalrock Capital was
given the final go-ahead to rescue the grounded airline Jet Airways by a
“committee of creditors” for the debt-laden airline.
The creditors’ panel on Saturday voted in favour of a plan submitted by the
consortium to revive and operate the debt-laden airline more than a year after
it was grounded.
The consortium, in which UAE entrepreneur Murari Lal Jalan teamed up with the
leading UK investment firm, has reportedly offered a payout of Rs8.5 billion to
lenders of India’s biggest private airline which went bankrupt with $1.2 billion
in debt. The offer also includes equity in the airline to the lender banks led
by State Bank of India.
Jet Airways, founded by Naresh Goyal, had piled up debts of about Rs80 billion,
and faces claims of nearly Rs360 billion, including salary arrears of employees.
Jet has 3,300 employees currently on its payroll as opposed to 22,000 employees,
including 6,000 on contract at its peak. Jet’s stock has been trading at the
upper circuit over the past few days on hopes that a final resolution is near.
Shares rose from Rs31.55 to Rs40.15.
Jalan, a billionaire entrepreneur, has investments across the UAE, India, Russia
and Uzbekistan in sectors including real estate, mining, trading, construction,
fast-moving consumer goods, dairy, travel and tourism, and industrial works.
He is the founder and chairman of MJ Developers, which is currently engaged in
developing residential and commercial properties in Uzbekistan.
Kalrock Capital, operating in financial the advisory and alternative asset
management sectors, is backed by Fritsch, an investment group founded by serial
entrepreneur Florian Fritsch.
Ashish Chhawchharia, the resolution professional appointed by the lenders of Jet
Airways, said in a stock exchange notification that the e-voting concluded on
October 17, 2020 and “the resolution plan submitted by Murari Lal Jalan, and
Florian Fritsch have been duly approved by the Committee of Creditors under
Section 30(4) of the Code as the successful resolution plan”.
According to informed sources, over 97 per cent of Jet Airways’ committee of
creditors voted in favour of the resolution plan submitted by the winning
consortium.
In July this year, two of the four shortlisted bidders’ consortia submitted a
bid to get a stake in the debt-strapped Jet Airways. This was the fourth and
final attempt to resurrect the airline which was grounded in April 2019 over
unpaid dues and multiple defaults.
Reportedly, both bidders, in their resolution plan, had proposed to the lenders
that they were willing to liquidate the assets and reinvest the money in the
revival of the airline.
Manoj Madnani, board member of Kalrock Capital, was quoted by CNBC-TV18 saying
the consortium’s plan is to run Jet Airways as a full-service airline. “So we
will start with domestic, we already have a route plan in mind for domestic, and
will go international as well depending on the slot allocation,” he said.
“We are really excited about this because India is destined to be the
third-largest aviation market globally. The current pandemic will not last
forever, and once that is behind, we are looking forward to taking it [Jet] to
the next level,” Madnani was quoted as saying.
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