All airlines are feeling a pinch of coronovirus, but the one that has not flown since April 2019 after falling under a pile of debt is the world’s best performer – at least from a share price standpoint.
The stock of Mumbai-listed Jet Airways India Ltd. has gained nearly 150% this year, a 42% drop in the 27-member Bloomberg World Airlines Index, which includes the world’s largest carriers.
Its fugitive gains are baffling market watchers, especially since Jet Airways is going through insolvency proceedings, with nearly 17,000 creditors seeking claims of nearly $ 3.4 billion and seizing most of its landing slots. . There is no question of any employee in this.
A panel of creditors approved a resolution plan last month, bringing the recovery of any arrears one step closer, but it does not guarantee the resumption of flights.
Ajay Srivastava, managing director of advisory firm Dimension Corporate Finance Services, said that while retail investors are in a state of ultimate bankruptcy, some are still buying in the hope that Jet Airways will succeed with a restructuring. The airline may not be considered a concern, but a shell in which assets can be sold, he said.
In its succession, Jet Airways was India’s No. 1 private carrier, taking over the monopoly of the state-run Air India Limited and offering intercontinental trips with free gourmet meals and in-flight entertainment. But a significant number of budget carriers, offering budget carriers, ultra-cheap tickets ate up their market share and Jet Airways began to sink into debt.
The proposal plan for Jet Airways was submitted by two individuals, Murari Lal Jalan and Florian Fritch, exchange filing shows. Jalan is a trader investing in India, Russia and Uzbekistan. Fritsch is the chairman of Kalrock Capital Management Ltd., a London-based financial advisor and alternative asset manager. The filing does not explain how the men plan to restructure the airline.
Ashish Chavcharia, a professional appointed Jet Airways’ insolvency, did not respond to a request for more information. Jalan, who is based in Dubai according to media reports, could not immediately be reached for comment. Manoj Madnani, described as a board member of the Jalan Kaloro Consortium, asked last week that questions are sent over email and he did not immediately reply.
Other investors might expect Jet Airways to go the “Ruchi Soya Way”, Srivastava said, in reference to a food company run by a yoga guru whose shares rocketed to slimmer versions after approving a bankrupt scheme. .
Ruchi Soya Industries Limited was acquired at the end of last year by a consortium led by Baba Ramdev’s Patanjali Ayurved Limited. The founders held 99% of Ruchi Soya’s capital as of March 31. Its shares grew at about 500-fold smaller volumes before pairing gains.
To limit that scenario in the future, India’s securities regulators are considering a change in the rules for firms emerging from bankruptcy, proposing that companies that are at least 10% below six months will be offered current Have to promote at least 10% over 18 months.
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