Jet Airways (JAI, Mumbai International) is reportedly in advanced talks to order about fifty Airbus Canada A220 aircraft. But the Jalan-Kalrock consortium currently in the process of taking over the carrier cannot place an order until it obtains a no-objection certificate from its former financing banks, according to India’s Economic Times.
Led by the new management, Jet Airways has managed to avert liquidation proceedings by agreeing to transfer to the banks about INR1.3 billion rupees (USD16.3 million) received from the lease of its aircraft to Air Serbia, sources close to the matter told the newspaper on August 30.
It was reported in July that the lenders, led by the State Bank of India, could have pushed the airline back into liquidation if the consortium had refused to distribute the proceeds from the leases to them. The lease payments date back to when Jet Airways and Air Serbia were equity partners with Etihad Aviation Group under the Etihad Airways Partners alliance from 2015 to 2018.
The consortium has now offered the banks payments of INR3.8 billion (USD47.7 million) in instalments and a 9.5% stake in the airline, the sources claimed.
Dubai-based businessman of Indian origin Murari Lal Jalan and Florian Fritsch, chairman of the London-based financial advisory and alternative asset manager Kalrock Capital Management, won a bid to acquire the company last year, a deal approved by the National Company Law Tribunal (NCLT), and by July 2022 it was promising a relaunch of commercial flight operations from September. But it still needs the no-objection certificate before securing an aircraft order, the sources explained, adding that the lenders had promised this only after the consortium commits to a timeline for implementing a debt resolution plan.
A spokesman for the consortium denied that any such restrictions are holding it back, saying: “This is absolutely incorrect, and the NCLT process does not restrict us.”
He added: “Liabilities and timelines for the payment of liabilities of past lenders are fixed and have no relation to the new business Jet Airways is doing, including placing an aircraft order. The intent of the IBC [Insolvency and Bankruptcy Code] is to revive businesses, not restrict or liquidate them. A successful resolution applicant, that is Jalan-Kalrock Consortium, is free to make operational decisions or acquire new assets for the company’s revival, as per its business plan and needs and requirements.”
On August 31, Bloomberg News reported that Jet Airways was in advanced talks to order about fifty A220s, with its own anonymous insiders claiming deliveries would start in 2025. They did not say whether the planes would be purchased or leased and stressed that the deal is still being finalised.
