The Kalrock Capital-Murari Lal Jalan consortium has won the bid for Jet Airways, giving the airline a second lease of life that often looked unlikely since it was grounded since April 2019.
The consortium has got the majority of the votes polled by lenders. Confirming the development, Manoj Madnani, Board Member of Kalrock Capital, told Moneycontrol:
"I want to thank the CoC and the RP for managing the insolvency process. We look forward to engaging with the Jet Airways stakeholders, and bringing back the glory and legacy of the airline."
While it's not clear yet how many votes the combine got from lenders, it needed at least 66 percent to go past the finish line.
"The e-voting concluded today, ie. October 17, and the resolution plan submitted by Murari Jalan and Florian Fritsch has been duly approved by the CoC," resolution professional Ashish Chhawchharia told the exchanges in an announcement later on Saturday.
Fritsch is the founder of Kalrock Capital.
"The resolution professional is in the process of filing an application in accordance with section 30 (6) of the code for approval of the said resolution plan by the Hon'ble NCLT and intimation of the same shall be given to the members as required," he added.
The resolution professional will submit the winning plan to the National Company Law Tribunal, which will have to then give the approval for the new owners to take over at the airline. The insolvency process had to get over by October 21, the deadline.
The Kalrock-Murari combine had faced off with the consortium of FSTC, Big Charter and Imperial Capital.
"I welcome the decision taken by the lenders, and congratulate the Kalrock-Jalan combine," Sanjay Mandavia, Founder of FSTC and Big Charter, told Moneycontrol.
"I would also like to thank the RP for handling the insolvency process, and my advisors Deloitte and Luthra & Luthra," said Mandavia, and added, "I would especially like to thank Mr Braja Jena, Chairman and MD of Imperial Capital, for standing by me throughout the process."
Mandavia, a former pilot who had earlier flown for Jet Airways, said he will now focus on launching FlyBig, a regional airline that is expected to take off later this year.
A revival during COVID-19 times
The revival of Jet Airways happens at a time when airlines across the aviation sector are struggling to keep flying. Since the COVID-19 pandemic broke out, several airlines filed for bankruptcy and the biggest of the carriers were forced to ground their fleet, and fire employees.
Of late, the sector is beginning to recover some of the lost ground. In India, traffic is still nowhere close to the 2019-levels, but it has picked up month-on-month. In many ways, the circumstances could turn out to be a blessing in disguise for the new owners.
While aircraft leasing rates have come down and fuel is cheaper, getting key manpower like pilots and engineers will be easier, that too at lower costs.
The Kalrock-Jalan bid is said to have offered a payout of Rs 850 crore to the lenders, led by State Bank of India, and also includes equity in the airline to the banks. On the other hand, the FSTC-Imperial consortium offer was a little less than Rs 800 crore.
Jet Airways had piled up debts of about Rs 8,000 crore, and faces claims of nearly Rs 40,000 crore, including salary arrears of employees.
As Moneycontrol had previously reported, the winning consortium had roped in two executives who were part of the senior management at Jet Airways. This includes Nikos Kardassis, the former CEO of the airline, and considered close to founder Naresh Goyal.
While it's expected to reveal more on its resolution plan in the coming weeks, the Kalrock-Jalan combine had tweaked its original proposal, which had focused on reviving the airline on international routes. But later, the combine is said to have told lenders that it will start off with services in the domestic routes, before going international.
This was similar to the proposal submitted by its competitor, the FSTC-Imperial consortium, which had suggested restarting operations by flying between metros. "I continue to believe that our offer was superior looking at the present circumstances in the aviation industry. We also had made provisions for the welfare of Jet Airways employees," Mandavia said.
All eyes are now on the Kalrock-Jalan combine, as reviving Jet Airways may turn out to be as challenging as it was winning it.This is a developing story. Please check back for updates.