The committee of creditors of Jet Airways on Monday decided to give the Synergy Group, the only entity interested in buying the beleaguered airline, time till November 15 to finalise a resolution plan. The Colombian group is understood to have held discussions with the Bird Group for investment into the ailing airline, sources told FE. Bird provides aviation management and other services in India and abroad.
With the additional time given to Synergy, the resolution will likely be pushed to December, sources close to the proceedings said.
Ravi Deol, the UK-based entrepreneur who was the first CEO of the coffee chain Barista Lavassa, is also understood to have held discussions with German Efromovich, owner of the Synergy Group, sources told FE.
According to the earlier timeline set out by Jet’s resolution professional (RP), Ashish Chhawchharia, interested parties were expected to submit a resolution plan latest by October 14. The final resolution plan was expected to be put before the National Company Law Tribunal (NCLT) for its approval on October 28.
“The Synergy Group is still doing due diligence. They had a video conference call with Jet’s management on Monday to understand which all routes they can begin operations from once the airline is revived. Lenders are hopeful, so some more time has been given,” the person told FE. The Directorate General of Civil Aviation (DGCA) has given time till mid-January for Jet Airways to file slot request for the summer season, the source added.
Jet Airways has been grounded for nearly six months now. The slots allotted to the airline have since been re-allocated to other airlines. The airline was admitted for insolvency on June 20. The 180-day deadline for completing the corporate insolvency resolution process (CIRP) will end on December 16.
Jet’s insolvency order stated that the airline’s revival is of national importance. “The corporate debtor company has more than 20,000 employees, and its revival at the earliest by a viable resolution plan is essential,” the order stated.
The airline was grounded on April 17 after lenders refused to provide emergency funding to continue operations. According to the latest update on the company’s website, creditors have filed claims worth `30,907 crore.
The RP has so far admitted claims worth over `14,000 crore.
FE last week reported that the Synergy Group has sought time till November 30 to finalise its plans for Jet Airways. The group is yet to find an Indian partner to invest in Jet Airways. The government, during its meeting with the Synergy Group in September, had raised serious concerns on whether the Synergy Group’s investment would comply with India’s foreign direct investment (FDI) regulations. As per the Indian FDI regulations, a foreign airline can directly invest only up to 49% in a scheduled Indian carrier.
Before setting his sight on Jet Airways, German Efromovich, owner of Synergy Group, tried to buy Italian airline Alitalia. Efromovich had in 2004 bought a bankrupt Avianca. The airline has since grown to become Latin America’s second largest. Earlier this year, Efromovich was reportedly removed from the board of Avianca Holdings for a loan breach.
Source: Financial Express, October 16, 2019