India’s Jet Airways to be saved by Kalrock Capital-Murari Jalan consortium

By Rahul Vaimal, Associate Editor
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Jet Airways
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India’s Jet Airways would be acquired by an investor consortium led by UAE-based businessman Murari Lal Jalan and UK-based Kalrock Capital under a multi-million dollar resolution plan approved by the carrier’s creditors.

More than a year after it was grounded, the creditors’ panel voted in favor of a bid proposed by the consortium to revive and operate the debt-laden airline.

The consortium, in which the UAE businessman joined up with the UK’s leading investment company, reportedly offered $115 million (Rs 8.5 billion) in payments to lenders of India’s largest private airline, which went bankrupt with $1.2 billion in debt. The offer also includes airline equity for lending banks led by the State Bank of India.

In a stock exchange notification, Ashish Chhawchharia, the resolution professional appointed by the lenders of Jet Airways, stated that the e-voting concluded on 17 October 2020.

“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”, Mr. Chhawchharia said.

According to the sources, More than 97 percent of the creditors’ committee of Jet Airways voted in support of the resolution proposal proposed by the winning consortium.

In July of this year, two of the four shortlisted consortiums of bidders submitted an offer to buy a stake in the debt-strapped Jet Airways. This was the fourth and final effort to revive the carrier, which was based on unpaid dues and other defaults in April 2019. Both bidders have suggested in their resolution plan that they would be willing to fully liquidate the property and reinvest the money.

Manoj Madnani, a board member of Kalrock Capital said, “The consortium plans 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”.

“We are 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,” he further added.

Jet Airways

Jet Airways, founded by Naresh Goyal, has accrued debts of approximately $1 billion (Rs 80 billion) and faces claims of nearly $4 million (Rs 360 million), including employee wage arrears. Jet has 3,300 employees currently on its payroll as opposed to 22,000 employees, including 6,000 on contract at its peak. Over the last few days, Jet’s stock has been trading on the upper circuit in anticipation that a final resolution is near. The sales increased to $0.55 (Rs 40.15) from $0.43 Rs 31.55.

Murari Lal Jalan

The billionaire entrepreneur Murari Lal Jalan has investments in sectors including real estate, mining, banking, manufacturing, fast-moving consumer products, dairy, travel and tourism, and industrial works throughout the UAE, India, Russia and Uzbekistan. He is the founder and chairman of MJ Developers, which is currently involved in the development of Uzbekistan’s residential and commercial properties.

Kalrock Capital

Kalrock Capital, which operates in the advisory and alternative asset management industries, is funded by Fritsch, an investment company founded by Florian Fritsch, a serial entrepreneur.