Thursday, October 08, 2020

Kalrock-Jalan consortium proposes Rs 1,000 cr investment in Jet; equity to lenders

Mumbai: A consortium of London based Kalrock Capital and UAE-businessman Murari Lal Jalan plans to infuse close to Rs 1,000 crore in the defunct Jet Airways NSE 4.88 % over the next five years and also willing to give a collateral, according to its proposed resolution plan, said people familiar with the plan.

“Kalrock's plan is to infuse Rs 380 crore in phases in the first two years and another Rs 580 crore in years three to five,” said one person involved in finalising the resolution plan.

“They are also willing to give collateral of Rs 250 crore as security and have promised cash to lenders from year three onwards irrespective of what happens to the airline. Lenders are being offered 9.5% equity during the restructuring period,” he added.

This puts the consortium ahead of the other one in the fray, comprising of Haryana-based Flight Simulation Technique Centre, Mumbai's Big Charter and Abu Dhabi’s Imperial Capital Investments.

The other consortium “plans to generate cash by selling existing airplanes of Jet and has no plans to infuse funds into the company,” said the person cited above.

“This is not attractive in current times when the aviation business is hit so badly. The second bidder wants to give 20% equity to lenders but it will not be valued as much because of low chances of it being successful. Both bids are very close to the liquidation value and we are hoping that lenders vote for revival rather than liquidation," he added.

Both the proposals would be put to vote on October 16, and the preferred bidder chosen, he added.

08/10/20 Joel Rebello & Anirban Chowdhury/Economic Times

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