Jet Airways stares at liquidation as Synergy Group yet to finalise plan

Synergy Group was understood to be in talks with Bird Group, which provides aviation management services in India and abroad, and UK-based entrepreneur Ravi Deol for investment into the grounded airline

Jet Airways crisis, Jet Airways, Synergy, NCLT, insolvency case, industry news
The CoC has already given two extensions to the Synergy Group, which has multiple issues holding it back from making a commitment.

By Anwesha Ganguly

Colombia’s Synergy Group, the only entity which evinced interest in the grounded Jet Airways, has been “less enthusiastic than hoped for” in moving forward with discussions and is yet to submit a final resolution plan for the airline, sources told FE.

In the absence of a concrete resolution plan by November 15, the airline will be staring at liquidation, sources close to the matter told FE. “If a plan is not in place by November 15, we lose any chance of requesting for slots in the next year’s schedule, which is not a desirable proposition since Jet Airways has been grounded since April. Lenders may not be keen on further extending the resolution timeline. So, in the absence of a viable plan, liquidation will be the only choice,” the source said.

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The group, headed by Bolivian-born entrepreneur German Efromovich, had last month sought additional time to present a business plan for the revival of Jet.  In a committee of creditors (CoC) meeting last month, the lenders had agreed to give the group time till November 15. However, there has been little communication from the Synergy Group since, said an official involved in the resolution process. The official added the group is yet to find an Indian partner to invest in the airline.

FE had earlier reported that the government, during its meeting with the Synergy Group in September, had raised serious concerns on whether the foreign entity’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. The group was understood to be in talks with Bird Group, which provides aviation management services in India and abroad, and UK-based entrepreneur Ravi Deol for investment into the grounded airline. Emails to the Synergy Group and its adviser on the Jet Airways resolution process remained unanswered till the time of going to press.

The resolution professional (RP) for Jet Airways, Ashish Chhawchharia, said that though he is yet to hear from the Synergy Group, there is no discussion on liquidation just yet. “We are waiting till November 15 to see what happens. To my knowledge, there is no discussion on liquidation yet. Depending on what happens in the coming week, the CoC will decide the way forward,” Chhawchharia added.

Jet Airways has been grounded for over six months now. Most of the slots allotted to the airline have since been re-allocated to other airlines. The airline was admitted for insolvency on June 20 and the 180-day deadline for completing the corporate insolvency resolution process (CIRP) will end on December 16. The National Company Law Tribunal will hear matters related to Jet Airways on November 18.

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 Rs 30,910 crore. The RP has so far admitted claims worth over Rs 14,000 crore.

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