Synergy Group yet to inform Jet lenders of its investment plans

New Delhi/Mumbai: Hopes for a revival of Jet Airways (India) Ltd are precariously poised as the only company that is assumed to be still interested in the grounded carrier, South America’s Synergy Group, has not informed lenders how it plans to revive the airline.

Ashish Chhawchharia, the resolution professional (RP) for Jet Airways, has not heard from Synergy Group, two people with direct knowledge of the matter said, requesting anonymity.

“There has been no update (from Synergy) since the company’s founder Germán Efromovich visited India a few days ago,” said one of the two people cited above.

Mint had on 17 September reported that Efromovich met Jet Airways’ lenders in Mumbai for a couple of days, as part of the South American company’s initial due diligence process to buy a significant stake in the grounded Indian airline.

During his visit to India, Efromovich, the 69-year-old Bolivian-born entrepreneur, wanted to understand the operations and finances of Jet Airways and also the situation that led to the grounding of the airline.

Efromovich also wanted to understand bankers’ interest in revival of the airline (Jet Airways), Mint reported on 17 September citing people close to the matter.

A banker had earlier told Mint that Synergy seemed to be a credible investor, especially with the group’s experience in running several airlines.

However, the banker who spoke on the condition of anonymity said that during their interaction with Synergy Group, resolution plan for Jet Airways was not discussed, though the resolution process and a probable timeline for its implementation were talked about.

During his visit to Mumbai, Efromovich also visited the Jet Airways’ hangar, where he interacted with the remaining staff members. He also expressed his interest to take over the grounded airline.

Efromovich’s Mumbai visit had sparked hopes of a revival of Jet Airways. Although many workers have left Jet Airways following its grounding, some of its pilots—especially those flying its Boeing 777 fleet—and the company’s engineering department, have stayed put.

According to a person close to the matter, Efromovich’s team told a few Jet employees, while visiting the hangar, that the South American company will present a resolution plan to lenders by 14 October, as it needed to complete the due diligence by then.

Mint couldn’t independently verify this. An e-mail sent to Antonio Guizzetti, president of Washington-based Guizzetti & Associates, legal adviser to Synergy Group on the Jet Airways acquisition went unanswered. Guizzetti was not available on his phone.

There are a few hurdles in Synergy Group’s bid to revive Jet Airways. While Efromovich wants a huge haircut from the lenders of Jet Airways on its existing debt of over ₹8,500 crore, the airline will also have to find an Indian partner, which they haven’t so far, said a third person with direct knowledge of the matter, who didn’t want to be identified.

Under India’s foreign direct investment (FDI) laws, a foreign carrier can invest up to 49% in an Indian airline. Also, the law states that the control of the airline should lie with Indian promoters, with a majority of board members required to be Indian citizens, including the chairman.

Another challenge is the financials of the Synergy Group. During the last few years, quite a few airlines owned or partially owned by the group have shut shop due to a funds crunch.