The resolution professional (RP) legal counsel on Wednesday informed the NCLT that the Synergy Group has been given access to all of Jet’s financials and due diligence is ongoing.
By Anwesha Ganguly
The Colombian Synergy Group, the sole entity interested in Jet Airways, has sought time till November 30 to complete its due diligence and put in a formal bid for the grounded airline, sources said.
The committee of creditors (CoC) for Jet Airways may give the group time till the end of October. The resolution of the airline will consequently get delayed further.
“The Synergy Group has not yet found an Indian partner. They are also taking time to complete due diligence and prepare a business plan. They have sought time till November 30, but that is not feasible since the plan needs to be in place in time for the government to allot slots for the summer schedule,” a person involved in the discussions said.
The summer season schedule starts from the last Sunday of March. The Directorate General of Civil Aviation (DGCA) typically expects airlines to file slot requests for the summer season by mid-October. According to the earlier timeline set out by the resolution professional (RP), 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 RP legal counsel on Wednesday informed the NCLT that the Synergy Group has been given access to all of Jet’s financials and due diligence is ongoing. “No (resolution) plan has been submitted yet,” the RP told the tribunal. The RP on Wednesday submitted the sixth report on the progress of the resolution process of the airline to the tribunal.
FE had in September reported that the resolution process for Jet Airways is likely to get delayed since progress has been slow in finding an Indian partner to invest in Jet Airways. The government, during its meeting with the Synergy Group, 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.
“There were representations made by the Synergy Group and other parties to the government to consider relaxing the FDI restrictions for Jet Airways. It is up to the government now. Meanwhile, the Synergy Group is in talks with Indian firms. The RP had suggested some names, but nothing concrete has emerged as yet,” the source said.
Jet Airways has been grounded for nearly six months now since April 17. The airline was grounded after lenders refused to provide emergency funding to continue operations. The slots allotted to Jet 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, the RP informed the NCLT on Wednesday. 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.
According to the latest update on the firm’s website, creditors have filed claims worth Rs 30,907 crore. The RP has so far admitted claims worth over Rs 14,000 crore. The CoC of the airline have also reached a settlement to evacuate Jet’s headquarters at Siroya Centre, Mumbai. The NCLT on Wednesday raised concerns that evacuating the headquarters may be detrimental to the resolution process. The matter will be heard by the tribunal on November 5.
Before setting 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.