Eighteen months after its closure and sixteen months after it became the first airline to be admitted under the insolvency and bankruptcy code (IBC), Jet Airways is finally ready to return, albeit with a new owner: Kalrock Capital and Murari Lal. They pull.
The Kalrock Capital – Murari Lal Jalan consortium resolution plan has been approved by the creditors committee at the conclusion of the electronic voting of the lenders on Saturday. “The electronic voting concluded today, that is, on October 17, 2020 and the resolution plan presented by Murari Lal Jalan and Florian Fritsch has been duly approved by the CoC under section 30 (4) of the code as the plan resolution successful, “the resolution said the professional in an exchange notification.
Sources said the plan presented by the Kalrock consortium won by an overwhelming majority.
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As the creditor committee voted for the Kalrock Capital-led consortium to revive the airline, with a majority, the Jet Airways resolution professional will now have to get the plan approved by the National Company Law Court (NCLT). Upon receiving NCLT approval, they would have to request approval from the ministry of civil aviation and the ministry of corporate affairs, respectively.
Jet Airways’ spaces at the main airports and their traffic rights were temporarily granted to other airlines. Your operating permit is inactive and should be activated and your pilot and engineer licenses should be renewed. “The entire investment is dependent on the airline receiving these approvals and the plan could still stumble,” said a person familiar with the matter.
A civil ministry official said spaces and rights will not be a problem. “Spaces and rights will be re-grouped and reallocated according to the size and demand of the airline. There are no problems with the spaces,” said a senior ministry official.
Claims made by financial creditors, operational creditors and employees have skyrocketed to more than Rs 40,000 crore, of which the resolution professional has admitted claims in the amount of Rs 15,525 crore. Financial creditors like State Bank of India, Yes Bank and others have claimed Rs 11,344 crore but only Rs 7,459. 80 crore have been admitted.
Lenders are expected to take a fairly large haircut on their exposure.
While aviation companies globally have suffered due to Covid-19, it has also presented opportunities for new investors. “A new airline could negotiate better rates with aircraft manufacturers and suppliers. Leasing rates have decreased. The availability of pilots has also been reduced and many could be ready to join with lower packages, ”said an aviation consultant KG Vishwanath.
Also in India, traditional airlines are much weaker now and have huge losses due to falling passenger traffic. With only two airlines (Air India and Vistara) offering business class service, there could be an opportunity to gain market share in premium traffic. However, it is unclear how the new owners would like to position the airline.
Still, the new owners would need to make a significant investment to get the airline up and running.
Kalrock Capital was founded by European businessman Florian Fritsch. According to his website, Fritsch began his career as a paramedic at the Red Cross and started his first company at age sixteen. For the past two decades he has invested in electromobility, real estate and renewable energy. This included the investment in Tesla in 2008.
Kalrock is a financial advisory and asset management company focused on real estate, venture capital and special situations. The firm has partnered with Dubai businessman Murari Lal Jalan who has investments in various sectors such as real estate, mining, trade, consumer goods in various countries such as the United Arab Emirates, India, Russia and Uzbekistan.
The Kalrock-Jalan combine took on the Imperial Capital-FSTC consortium, which is also establishing another airline in India called Fly Big. The start-up carrier has received routes under the government’s regional connectivity scheme (Udan) and expects to start operating on Udan and non-Udan routes from next month. Initially, Fly Big aims to have a fleet of six ATR aircraft.
Jet Airways operated its last flight between Amritsar-Mumbai on April 17, 2019, as the lenders rejected its demand for emergency funds. It has been in a situation of insolvency since June 2019.
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