On Wednesday, shares of Jet Airways were locked in a 5 percent upper circuit for the tenth straight session. During the period, the stock has surged 62 percent from Rs 28.7 on 7 October to Rs 46.5 on 21 October.
Hopes of revival of the bankrupt airline after almost 18 months of being grounded have surfaced after the resolution plan of UK-based Kalrock Capital and UAE-based Murari Lal Jalan was approved by the Committee of Creditors (CoC).
Jet Airways has been grounded since April 2019 on a massive liquidity issue. Various classes of creditors have collectively made claims of Rs 40,259.12 crores against Jet Airways in NCLT (National Company Law Tribunal).
The full-service airline is expected to fly again in four to six months if approvals are received.
Ashish Mohanty, President of Jet Aircraft Maintenance Engineers Welfare Association (JAMEWA), told IANS news agency that Jet's first flight may be in about four months after the takeover by the new owners.
He said that the 12 aircraft of the airline need to be restored after maintenance and made operational. The new owners may bring in new aircraft and have already set up a management team to restart operations.
The Kalrock-Jalan consortium resolution, however, calls for an around 90 percent haircut for Jet Airways' lenders. The admitted debt of Jet Airways was Rs 8,000 crore.
A CNBC-TV18 report citing banking executives says that the consortium offer entails a total payout of Rs 866 crore to all creditors. Of this, the Kalrock-Jalan consortium has offered Rs 380 crore to financial creditors, and another Rs 391 crores in the form of non-convertible debentures (NCDs).
According to IANS, creditors would get 10 percent equity in the revamped airline under the resolution plan.