It’s been over a year since Jet Airways collapsed. This week, in the fourth round of bidding, the grounded airline has attracted not one, but two bids. Creditors have been looking for a new owner to take over the airline since its collapse in April 2019. After three failed attempts, many thought the airline would be liquidated. However, these new bids could mean Jet Airways gets back in the sky before the end of this year.
The Jet Airways saga has been going on for over a year now. The airline ran out of funds in April of 2019, and creditors have been trying to rescue it ever since. Three failed attempts to find a bidder put the future of the airline in a questionable situation. However, it seems that the fourth time is the charm.
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In this most recent round of bidding, Jet Airways attracted 12 Expression of Interest. This was narrowed down to a shortlist of four potential bidders: UK financial firm Kalrock Capital which is bidding with Murari Lal Jalan. The other three other bidders are Canadian entrepreneur Siva Rasiah, Alpha Airways, and a consortium of three companies.
Having previously failed to attract any bids, it has now drawn two, both from the shortlisted options. The first is the consortium of three companies. They are Flight Simulated Technique Centre, Big Charter Ltd, and Dubai-based Imperial Capital Investments LLC. The second bidder is the partnership between Kalrock Capital and entrepreneur Murari Lal Jalan.
The consortium led by Dubai-based Imperial Capital presented a rescue plan to on Tuesday. In an interview with UAE publication the Khaleej Times, Biraja Jena, chairman of Imperial Capital said,
“We have presented the resolution plan to the authorities. We have given them options for the revival of the airline within a short period, including for the employees. They have a priority claim on the overall realization of the assets and, of course, our investments. We are trying to dedicate a huge sum of immediately realizable assets into one basket, and that basket of money will be utilized for payment of employee dues in addition to stock options and phased induction of employees in the revived company.”
Jet Airways back in the sky?
If the consortium does take over Jet Airways, it plans to begin a small operation with around eight aircraft. The flights will be mainly domestic with just a few international destinations. Jena confirmed that the aim was to have the airline back in the skies as soon as the acquisition is complete. Imperial Capital has over Dh2.3billion ($630 million) worth of assets, so it can undoubtedly bankroll the airline until it begins making a profit again.
Although Jena is confident, he is still competing again the consortium led by Kalrock. The London-based financial investment firm has taken a very different approach. Kalrock and Murari Lal Jalan plan to restart Jet Airways with 27 widebody aircraft. They have also presented their bid to creditors.
Ashish Chhawchharia, who is in charge of restructuring Jet Airways, will evaluate both plans to see which is the most viable option. Once this has been decided, and assuming the plan meets specific insolvency laws, negotiations regarding the final details will begin. After this, which could take a month, we may see Jet Airways’ triumphant return to the skies.
What do you think of the two bidders? Which option is more viable? Let us know your thoughts in the comments.