Jet Airways creditors agree on new owners after months of talks

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FILE PHOTO: Jet Airways employees display placards during a protest at Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, May 8, 2019. REUTERS / Francis Mascarenhas / File Photo

MUMBAI (Reuters) – India’s Jet Airways is reportedly taken over by a consortium of investors as part of a multi-million dollar resolution plan approved by the carrier’s creditors on Saturday.

The plan submitted by a consortium of London-based Kalrock Capital and UAE-based businessman Murari Lal Jalan comes after months of discussions over the airline’s future and has been confirmed in a regulatory filing , who gave no details about the deal.

A source familiar with the situation said the new owners had agreed to inject 10 billion rupees ($ 136 million) as working capital for the airline’s revival. An additional 10 billion rupees will be returned to creditors over a five-year period.

The airline’s financial creditors will also get a 10% stake in the company, the source said, although the plan remains subject to approval by the bankruptcy court and the country’s airline regulator.

Jet – which operated a fleet of more than 120 planes serving dozens of domestic destinations and international hubs such as Singapore, London and Dubai – was forced in April 2019 to bring all of its flights to a standstill, crippled by mounting losses as he was trying to compete with low-cost rivals.

After Jet’s operations ceased, at least 280 locations were vacant in Mumbai and 160 in Delhi, which were subsequently ceded to rivals. The recovery plan is also based on the recovery of some of these niches.

“The plan is to ramp up slowly and gradually increase capacity as they will start over from zero,” the source said. Any resumption of flights is unlikely to take place for at least three to six months.

Since shutting down, the airline and its lenders have been looking for suitors. Jet’s financial and operational creditors owed nearly 300 billion rupees after operations ceased.

Reporting by Nupur Anand; Editing by David Holmes

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