UAE-based entrepreneur Murari Lal Jalan and UK-based asset management firm Kalrock infused Rs 100 crore into financially crippled Jet Airways as part of the process to take over the airline.
The development comes following the National Company Law Appellate Tribunal's (NCLAT) directive allowing the revival of Jet Airways.
With this infusion, JKC has now invested Rs 250 crore in Jet Airways and now is only required to fund the remaining Rs 100 crore in Jet Airways by September 30, 2023, to take control of the iconic airline, Jet Airways.
- JKC Consortium statement
The Jalan-Kalrock consortium had won the bid to take over Jet Airways after it was grounded in 2019 due to mounting losses and debt of around Rs 8,000 crore, which is now said to be Rs 12,000 crore.
In the aviation sector, the revival of a grounded airline is rare. But observers say India has a good appetite to allow for Jet Airways revival.
Currently, IndiGo reigns supreme in the Indian skies and Air India is only coming up to give competition to the domestic carrier.
Following Go First's bankruptcy earlier in the year, flyers saw airfares jump with a lack of competition. With Jet Airways' revival, there is likely to be more healthy competition in the skies.
But there are challenges too, since several more airlines are already in competition like Vistara and Akasa Air.
The controversy surrounding JKC
The Jet Airways case has been called in various media sections as a test of the country's Insolvency and Bankruptcy Code which was amended in 2021.
The bidding process for Jet Airways has also been under scrutiny; given that more established aviation players backed out early, unknown foreign bidders made their interest known, and a little-known Jalan-Kalrock consortium won the bid.
Furthermore, Murari Lal Jalan's close ties to the infamous Gupta brothers of South Africa have also been questioned.
Some reports even claimed that Jet Airways' initial owner Naresh Goyal is pulling the strings behind the scenes.
However, JKC has denied the claims of any business or professional relations to the Gupta brothers or any relations to Naresh Goyal.
A court battle over clearing banks' debts, payment to employees, and other issues is currently ongoing.
As of August 21, 2023, Additional Solicitor General N Venkatraman, for the lenders, argued against the encashment of the performance bank guarantee (PBG) for Rs 150 crore. He said that half of Rs 350 crore will go to clearing regulatory dues.