The winning bid attracted over 99 per cent votes, with lenders overwhelmingly voting for a revival instead of recovery through liquidation.
The Kalrock Capital-Murari Lal Jalan consortium has proposed to re-launch Jet Airways as a full-service carrier, with an initial investment of Rs 1,000 crore.
It has initiated discussions with lessors and international airlines for contracts and partnerships.
On Saturday, the committee of creditors voted in favour of the Kalrock-Jalan consortium over the FSTC-Imperial Capital combine.
The winning bid attracted over 99 per cent votes, with lenders overwhelmingly voting for a revival instead of recovery through liquidation.
While Jet has admitted claims of over Rs 15,000 crore, the resolution plan consists Rs 866 crore in upfront and deferred payment to creditors.
A portion of the sum will be used to cover insolvency resolution costs.
Banks will also get a 9 per cent equity stake in the airline and an upside from the sale of aircraft.
Employees have been offered 75 per cent stake in Jet’s ground handling arm, as well as a financial incentive of close to Rs 20,000 each.
"Our plan takes into consideration the interests of all stakeholders, including creditors and employees,” said Manoj Madnani, board member of Kalrock Capital.
Madnani said the airline will initially restart domestic operations as a full-service carrier.
The consortium will also tap cargo opportunities, and is in the process of selecting a management team.
“We remained optimistic even though most had written off a revival. Lenders, too, supported us," said resolution professional Ashish Chhawchharia.
“By voting for the Jalan-Kalrock consortium, in the midst of the pandemic, the lenders have voted for resolution over liquidation, thereby truly vindicating the spirit of India’s insolvency process.
"Stakeholders including employees are naturally excited.
"With support of all including the government, we expect Jet to fly once again, soon,” said Rajesh Prasad, chief strategy officer of Jet Airways.
Yet, a big task lies ahead, given that the winning bidders will have to put together a team and secure all regulatory approvals.
Securing prime slots at airports will be critical for operations, and a denial could be a potential deal-breaker.
While the low cost base will be an advantage for the new owners, they will need to make substantial investments.
India remains a low-fare market and uncertainty over Covid-19 could pose challenges.
On their part, Jet’s lenders are giving revival a chance as liquidation would have yielded little result.
Photograph: Amit Dave/Reuters
