Thursday, September 16 2021

Dive In

General Li, I want to assure you that the American government is stable and everything is going to be okay. We are not going to attack or conduct any kinetic operations against you… General Li, you and I have known each other for now five years. If we’re going to attack, I’m going to call you ahead of time. It’s not going to be a surprise.

That’s what the chairman of the Joint Chiefs of Staff, General Mark A Milley told his Chinese counterpart, General Li Zuocheng of the People’s Liberation Army—in a secret phone call back in October 2020. The reason for the call: Milley was extremely worried that President Trump would trigger an all-out war with China. He would make a second such call to avert war in January—because by then Milley was convinced that “the president had suffered a mental decline after the election.” These are among the explosive revelations in a new book by Bob Woodward. Washington Post has more details.

A quick heads up: The latest episode of the splainer podcast ‘Press Decode’ takes an interesting look at how power relationships work in two totally different areas: VPNs and the fashion industry. Be sure to head over to the IVM website, Spotify or Apple Podcasts to listen to our always lively team:)

Big Story

Jet Airways gets ready to fly

The TLDR: The airline greatly beloved by frequent fliers will be back in business early next year. But will the new Jet—resurrected from bankruptcy—be anything like the old Jet?


Remind me what happened to Jet....

Two years ago, Jet Airways halted operations because it ran out of cash—having spent most of 2018 posting massive losses, struggling to pay employees and facing probes for tax evasion and safety lapses. Its lenders finally refused to shell out any more emergency funds, and the last flight was in April, 2019. Then it spent months in search of a buyer. When none seemed inclined to bite—including its international partner Etihad—the airline went to the National Company Law Tribunal (NCLT) which set about finding a suitable suitor. 


The new & proud owners: Since no other airline wanted to take on Jet, the prize went to a consortium of investors. It was led by UK-based asset management firm Kalrock Capital and UAE-based businessman Murari Lal Jalan—neither of whom have any experience in aviation. London-based Kalrock Capital describes itself as a “global firm operating in financial advisory and alternative asset management,” and specialises in real estate, venture capital and “special situations”—which may be the category under which Jet qualifies lol! Jalan is a multibillionaire with investments across various areas—especially real estate—and across the world, including Russia and Uzbekistan.


Point to note: Jalan appears to be on an aviation roll. He is also close to sealing a deal to start a full-service airline and build a new airport in Uzbekistan.


Ok, so what’s the delay?

Debt resolution: At the time of its bankruptcy, Jet owed Rs 154.32 billion (15,432 crore) to its creditors. The NCLT first had to approve the Jalan-Kalrock proposal to resolve those debts. The consortium has now agreed to:

  • Pay creditors, including banks, Rs 11.83 billion (1,183 crore) over a five-year period.
  • Give banks a 9.5% stake in the airline, while the consortium will hold 89.79%.
  • Give employees a 0.5% stake in its equity.


The plan was approved in June by NCLT—clearing the decks for Jet’s return.


Getting ready for takeoff: There’s also a lot of groundwork involved in getting the airline back to work:


“[I]t will have to obtain various approvals and certifications, including an air operator’s permit, security clearances for the new owners, airworthiness of planes, permission to import planes, etc. The induction of pilots and their refresher training could take two to three months if the new owners rehire old employees. Similarly, cabin crew and engineers would also have to undergo refresher training.”


The proposed timeline: On Monday, Jalan-Kalrock announced that it will restart domestic operations by the first quarter of 2022, and short-haul international flights by the third or fourth quarter.


Still an issue: Employees of the airline are unhappy with the plan. The company owes hundreds of them anywhere between Rs 3-85 lakhs each. And the consortium has only offered to pay Rs 23,000 per head, and a total of Rs 52 crore—which the unions rejected. The tribunal has agreed to review the employees’ claims.


So will it be like the old Jet?


In today’s edition

Headlines That Matter

  • Pitched battles within the Taliban
  • Crime is down, riots are up
  • Insta knows it’s toxic for teens
  • Indian link to US egg prices


Reading Habit

  •  Nonita Kalra—the doyenne of Indian fashion takes our Book Addict's Quiz 

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