Stalled efforts to revive Jet Airways (JAI, Mumbai International) received a jumpstart last week with both the airline's new owners and out-of-pocket lenders reportedly making some concessions to move forward the airline's relaunch plans. The Kalrock Capital-Murari Lal Jalan consortium, owners of Jet Airways, have reportedly agreed to put more capital into the airline and make good on an agreed first installment of payments to the lenders. In exchange, those lenders have agreed to waive some conditions to help the consortium to complete the acquisition process.
As reported by India's Economic Times, as part of a June 2021 National Companies Law Tribunal (NCLT) approved restructuring plan, the consortium had agreed to make a payment to lenders of INR3.8 billion Indian rupees (USD46.2 million) in installments. However, lenders are yet to receive any payments. Once India's second-biggest airline, Jet Airways under the then-ownership of Naresh Goyal went bankrupt and stopped flying in 2019.
The airline's India-based administrator, Grant Thornton, accepted INR74.53 billion (USD906.9 million) in claims from creditors during the bankruptcy process. As part of the proposed takeover deal, the new owners accepted responsibility for INR10 billion (USD121.7 million), offering a combination of installment payments, monies from the future sale of assets, and a 9.5% stake in the new airline. It was enough to secure tentative approval from the former financing banks.
Since then, the new owners of the airline were reluctant to invest further capital into the business and keen to conserve the existing capital to relaunch the airline. However the Jalan-Kalrock consortium needed the lender's okay to do this, and the lenders, aggrieved at the non-payment, have failed to agree to issuing the no-objection certificate needed to finalise the takeover, leading to the current deadlock.
However, the consortium reportedly agreed in late September to inject extra capital and pay the first instalment due to the lenders. In exchange, the lenders have agreed not to contest an application to the NCLT to waive certain conditions in the approved restructuring plan. The relevant conditions deal with the validation of Jet Airways' air operator's permit, approval of the business plan, and approval to hand back all suspended slots including bilateral and air traffic rights to the airline.
"Because of the delay in the implementation of the plan, lenders have agreed not to oppose any plea by the consortium in the NCLT seeking a waiver of these conditions. Jalan-Kalrock has never denied transferring the money but the fact that it has taken so long raises doubts on their intentions," a person close to the negotiations told The Economic Times.
While Jet Airways continues to say a restart is imminent, it has so far failed to secure aircraft to facilitate the restart. That problem is largely linked to the inability of the airline's new owners to yet close the acquisition process.
