India’s Jet Airways secures $6.6mn loan to finance restart

Jet Airways (JAI, Mumbai Int’l) has secured a INR500 million rupee (USD6.6 million) unsecured inter-corporate deposit from Orion IT, a fund owned by the airline’s forthcoming co-owner Murari Lal Jalan, to finance its recertification and relaunch.

The grounded carrier said in a stock market filing on February 14, 2022, that the deposit will bear no interest and will be payable in one or more tranches ahead of the carrier’s relaunch. Jet Airways will start repaying the facility only once it is recertified and after it repays all obligations to financial creditors.

Orion IT is owned by Murari Lal Jalan and Ankit Jalan. Murari Lal Jalan is also a partner in a consortium with Kalrock Capital, which submitted an approved resolution plan for the airline and is set to become its new owner.

However, according to the terms set by the National Company Law Tribunal, the Murari Lal Jalan-Kalrock Capital consortium can only take ownership of the airline once it regains its Air Operator’s Certificate. This has led to a stalemate as the new investors have been unwilling to fund the airline’s AOC drive due to the fact they currently have no stake and no formal guarantees. Without such investment, the airline will not be able to bear the costs of recertification.

As the resolution plan is valid through March 22, 2022, the Indian carrier has to resecure its flying permit by this date to facilitate the formal transfer of ownership. For the time being, the airline remains owned by a consortium of its financial creditors.