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Synergy Group seeks time till December for Jet Airways bid
2 min read.Updated: 15 Nov 2019, 10:48 PM ISTRhik Kundu
The airline’s assets will likely be liquidated if Synergy fails to draw up a resolution plan
Synergy Group had time till 15 November to submit its bid for the grounded airline
NEW DELHI :
Synergy Group, the only bidder for Jet Airways (India) Limited, has asked for an extension to submit a potential bid for the grounded airline, a person with direct knowledge of the matter told Mint on Friday.
The conglomerate, controlled and co-founded by 69-year-old billionaire Germán Efromovich, has sought time till December from Ashish Chhawchharia, the lenders-appointed resolution professional (RP) for Jet Airways.
Synergy Group had time till 15 November to submit a bid for Jet Airways. If the company fails to cobble together a resolution plan for Jet Airways, the assets of the airline will likely be liquidated to pay off its debt.
"Synergy Group has asked for an extension (to submit) bid. However, this has to be approved by the Committee of Creditors (CoC) of the airline, which meets on 19 November," the person said, requesting anonymity. The CoC will take a decision on this on 19 November, the person added.
This is the second time that Synergy Group has asked for an extension to consider a potential bid for Jet Airways.
The CoC had earlier extended the deadline for Synergy Group to submit a bid for Jet Airways to 15 November after it emerged as the only interested party to bid for the grounded airline in August. The South African company, which signed a non-disclosure agreement to access the data room for due diligence, was then asked to place bid by the due date.
An email sent to Antonio Guizzetti, president of Washington-based Guizzetti & Associates, legal adviser to Synergy Group, on the Jet Airways acquisition went unanswered.
Jet Airways suspended operations in April because of a severe cash crunch. A consortium of 26 banks led by the State Bank of India has approached the National Company Law Tribunal to recover dues of more than ₹8,500 crore.
The airline has had negative net worth for long, having run a loss of more than ₹13,000 crore over the past few years.
Meanwhile, 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 have to zero in on an Indian partner, which they haven’t so far, said a person with direct knowledge of the matter, who also didn’t want to be identified.
According to media reports, Synergy Group has held discussions with potential Indian partners like the Bird Group to bid for Jet Airways. Mint couldn't independently verify these reports.
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 crunch of funds.