Any resolution plan for the bankrupt Jet Airways is likely to get delayed as the sole entity to have envinced interest, the Synergy Group, is yet to find an Indian partner. According to sources close to the development, the Synergy Group has been speaking to some Indian entities, but so far has not been able to make any progress.
“The resolution professional (RP) has introduced the Synergy Group to a few Indian companies. The situation is not very promising at this point. We are hoping for some development in another week, it is progressing slowly,” one of the people involved in the process said.
There is still a month’s time before the final resolution plan is expected to be presented before the National Company Law Tribunal (NCLT) for its approval, but the RP’s team is expecting the process to get delayed, the source said. According to the timeline set by the RP, interested parties are expected to finalise a resolution plan by October 14, which is to be presented before the NCLT on October 28.
Before setting sight on Jet Airways, German Efromovich, owner of the Synergy Group, tried to buy Italian airline Alitalia. Last week, the group met with the lenders of Jet Airways and the civil aviation ministry officials to apprise them of its plans.
As earlier reported, civil aviation ministry officials had expressed concerns on whether Synergy would be able to find a domestic partner to comply with the foreign direct investment (FDI) regulations for the aviation sector. As per the regulations for the sector, a foreign airline can directly invest up to 49% in a scheduled Indian carrier.
However, the rule applies only to those entities which directly own an airline. If the foreign entity is an investment arm or private equity fund or an industry conglomerate, FDI can go up to 74%, which is the maximum permissible investment that can be held by a foreign investor, provided it is explicitly not an airline.
Synergy Group’s advisor in the resolution process did not respond to FE’s email till the time of going to the press.
The Synergy Group’s advisor had earlier told FE that it expects the Jet Airways’ lenders to take a haircut. The financial creditors alone have admitted claims worth over Rs 8,200 crore with Jet Airways, data on the airline’s website shows. So far, creditors have submitted total claims worth Rs 30,907 crore, of which claims of around Rs 14,000 crore have been admitted by the RP. Jet Airways was grounded on April 17 this year and insolvency proceedings against the airline were initiated on June 20.
Source: Financial Express, September 28, 2019