The Jet Airways rescue may happen soon; two new lenders have received new bids for the revival. But the new owners will need to raise more capital to turn around the airline quickly, bankers and industry experts said. On Saturday, a consortium of UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan bid for ₹1,000-crore, which the company accepted.
According to two bankers involved in the resolution process, lenders plan to discuss capital infusion with the new owners after deciding on the initial payout to lenders from the first round of investment. The winning bidders are expected to restart Jet's operations by April 2021, the bankers said on condition of anonymity. The resolution plan however needs approval from the National Company Law Tribunal (NCLT).
"Although there is value in the airline, they (consortium) will have to see whether they have enough backers (for funding) in place to sustain operations. Cash recovery for financial creditors will be very small —initially about ₹700 crore to ₹800 crore—and will be paid in a staggered manner, over the next few months," one of the two people cited above said.
"The size of Jet's operations, once restarted, will depend on the portion of money infused by Kalrock and partners that will be used for acquisition of aircraft and operations after paying off creditors," said Sanjiv Kapoor, former chief strategy and commercial officer at Vistara and former chief operating officer at SpiceJet. "An investment of ₹1,000 crores was good enough to start medium-sized airlines like JetBlue or Azul from scratch. But, when the airline has a large debt obligation, one would assume a much higher investment is needed," he added.
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