Jet Airways gets ready with revival plan

Jet Airways, India’s grounded private sector carrier, is getting ready to take off in six months with an initial fleet of seven aircraft in line with a revival plan as its prospective takeover consortium faces a November 3 deadline to submit a performance security bond of Rs1.5 billion.

The debt-ridden airline is proposing an upfront payment of Rs4.87 billion to creditors in the initial stage as per the revival plan revealed by informed sources. The plan includes a post re-launch deferred payment of Rs5 billion, a fraction of the total Rs400 billion claims the airline currently faces.

As per the resolution plan, Jet Airways will sell its A330 and B737 aircraft and distribute the proceedings among its creditors.

Starting with domestic operations, the airline will be launching cargo and international operations.

The consortium of Murari Lal Jalan, a UAE-based businessman, and Kalrock Capital, a UK investment firm, which won the takeover bid last week, was informed by the resolution professional to furnish the performance security by November 3.

The Jalan-Kalrock consortium will get more than 90 per cent stake in the grounded airline, while the rest would be distributed among lenders and some of the employees.

The plan of the consortium is to re-launch the full-service carrier with an initial investment of Rs10 billion after getting the final go-ahead from the National Company Law Tribunal which is hearing the insolvency proceedings. Once the NCLT approval is in, the investors are ready to take the airline to the skies within six months.

The security provision is in line an amendment that was brought in under the Insolvency and Bankruptcy Code in early 2019, to ensure that the winning bidder doesn't withdraw its plan later.

— issacjohn@khaleejtimes.com