Synergy Group, Prudent ARC fail to submit resolution plans for Jet Airways before February 17 deadline

Forum Gandhi Mumbai | Updated on February 17, 2020

Prudent ARC has asked for an extension to submit a binding bid; South American conglomerate Synergy Group may be out of the race

Jet Airways has not received any concrete resolution plan from potential bidders Synergy Group and Prudent ARC ahead of the February 17 deadline.

Prudent ARC has asked for an extension to submit a binding bid, whereas Synergy may be out of the race.

On Tuesday, the Committee of Creditors (CoC) will discuss whether to give an extension or liquidate the assets of the debt-strapped airline.

According to two people in the know, Prudent ARC has asked for one more month.

Another person added that “Prudent has been in constant communication with the airline’s legal representatives and lenders. They have been given access to the data room and they look serious.”

However, the question remains whether the CoC will approve a second extension. “Jet has been given enough leeway to keep it a going concern... it is unlikely to get an extension,” said a source.

Synergy may opt out

Meanwhile, the source said that South American conglomerate Synergy Group may not submit a binding bid as it still does not have clarity on Jet Airways slots, particularly, the slots at Heathrow airport.

According to Foreign Direct Investment (FDI) norms, a foreign airline cannot own more than a 49 per cent stake in an Indian airline. Therefore, Synergy would need an Indian partner even if it had bid.

Jet Airways temporarily shut operations in April 2019, and was dragged to the insolvency court in June 2019. After the 180-day period had ended, it was given an extension of up to 270 days. The 270-day period of the insolvency process ends in the second week of March.

The source added that it did not make sense to liquidate as the deadline for the completion of the resolution process is less than a month away anyway.

At its peak, the airline had 22,000 employees, including 6,000 on contract. According to company sources, the company still has over 5,500 employees on its payroll.

As on October 20, the total claims against Jet Airways stood at ₹36,090 crore, of which the resolution professional has so far admitted over ₹14,640 crore.

Published on February 17, 2020

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