South America’s Synergy Group seeks more time to bid for Jet Air

Forum Gandhi Mumbai | Updated on November 15, 2019 Published on November 15, 2019

South America’s Synergy Group Corp has asked for a second extension to submit a final bid for Jet Airways, said Grant Thronton’s Ashish Chhawchharia, the Resolution Professional for the airline. The Committee of Creditors (CoC) had earlier given Synergy an extension to submit a bid by November 15.

Synergy was the only company that had placed an Expression of Interest (EoI) for the debt-strapped airline in August. Back then, the CoC had extended the last date to submit an EoI because Synergy had shown the initial interest.

After the EoI, the company signed an non-disclosure agreement which had given it the access to the data room for due diligence.

When BusinessLine asked the RP on Synergy’s plan to place a bid, Chhawchharia said: “They have asked for an extension for about a month till December-end; however, it is subject to approval by the CoC.”

The CoC is scheduled to meet again on November 19.

Another person in the know said that the South American conglomerate, which owns a majority stake in Avianca Airlines, is exploring various options and preparing a business plan as a part of which Synergy is considering a second hub for Jet Airways in South America. The company is also said to be in conversation with a few companies in South America.

In talks with partners

It was also reported that Synergy’s founder German Efromovich was in talks with two Indian partners -- UK’s Ravi Deol and the Bird Group -- as the foreign direct investment norms do not allow an international company to hold more than 49 per cent stake in the Indian airline. BusinessLine had also reported that Efromovich was in India and had met authorities in Mumbai and Delhi. Antonio Guizzetti, President of G&A Consultancy, who is the consultant for Synergy, had said that as a part of their plans, Synergy may ask for a 60-80 per cent haircut from the lenders of Jet Airways as a pre-condition to pick up an equity stake in the stressed airline. It may also ask the lenders to convert 10-20 per cent of their total debt into equity.

Further, there could be a demand for downsizing the workforce from the current 14,000 to 7,000 employees to revive the airline. Currently, the employee base on payroll of Jet Airways is 5,500 employees.

Jet had debt of ₹8,500 crore, with SBI being the lead lender, as of October, the debt has increased to over ₹14,000 crore. On June 20, SBI dragged the airline to the insolvency court over unpaid dues. The next hearing for the same is set for November 18.



Published on November 15, 2019
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