Muscat Daily

Cred­i­tors back plan to get In­dia's Jet Air­ways fly­ing again

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New Delhi, In­dia - Cred­i­tors on Satur­day backed a sur­prise plan by a con­sor­tium to re­vive Jet Air­ways 18 months af­ter In­dia's big­gest pri­vate air­line went bank­rupt with US$1.2bn in debt.

Lon­don in­vest­ment fund Kal­rock Cap­i­tal and Dubai-based ty­coon Mu­rari Lal Jalan pro­posed the res­cue that was ' duly ap­proved' by a cred­i­tors' com­mit­tee, Jet Air­ways said in a state­ment to the Bom­bay Stock Ex­change.

The state­ment did not give de­tails of the plan but me­dia re­ports said they had of­fered to make a pay­ment of about US$115mn to cred­i­tors and eq­uity in the new firm which they wanted to con­cen­trate on in­ter­na­tional routes.

Cred­i­tors, mainly In­dian public sec­tor banks, took over Jet Air­ways in early 2019 but failed to keep it op­er­at­ing as its cash crunch grew. It was fi­nally grounded in April 2019.

On top of its US$1.2bn debt to the banks, the air­line also faces huge claims from 20,000 for­mer staff, air­ports and sup­pli­ers. To­tal li­a­bil­i­ties could top US$4bn.

Kal­rock Cap­i­tal, founded by Ger­man en­tre­pre­neur Flo­rian Fritsch, fo­cuses on real es­tate and ven­ture cap­i­tal and has a ma­jor in­vest­ment in elec­tric car maker Tesla. Mu­rai Lal Jalan has built up his for­tune from min­ing, pa­per man­u­fac­tur­ing and trad­ing across sev­eral coun­tries.

The con­sor­tium will need ap­proval from a gov­ern­ment tri­bunal and In­dia's avi­a­tion min­istry be­fore seal­ing the deal to pur­chase the air­line which would have to re­claim flight slots since given to other air­lines.

The move comes de­spite the crip­pling blow dealt to the global avi­a­tion in­dus­try by the coro­n­avirus pan­demic which this year brought in­ter­na­tional flights to a near stand­still.

In­dia is still only al­low­ing a slow re­sump­tion on do­mes­tic routes and very lim­ited in­ter­na­tional flights.

Bad in­vest­ments, fi­nan­cial mis­man­age­ment, com­pe­ti­tion from low-cost car­ri­ers, high oil prices and a weak ru­pee led to the col­lapse of Jet Air­ways.

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