After Jet Airways received a late expression of interest (EoI) from South American conglomerate Synergy Group Corp last week, the airline on Tuesday postponed its final date for initial bids submission for the second time. The deadline is now August 31, and the airline's resolution professional (RP) Ashish Chhawchharia now has three EoIs in hand, including Panama-based Avantulo Group and a Russian fund Treasury RA Creator.
Synergy Group Corp, which owns a majority stake in Avianca Airlines, the second-largest airline in Latin America, is planning to pick up 49 per cent stake in Jet Airways, The Business Standard reported. As per government norms, a foreign carrier can neither hold over 49 per cent in a domestic airline, nor effectively control it.
"We intend to structure the acquisition as a foreign company. Jet Airways is publicly listed and we hope lenders would be willing to convert their debt into equity. We will also discuss partnerships with Indian infrastructure companies," Antonio Guizzetti, president of consultancy G&A, which is advising the Synergy Group regarding the stake buy, told the daily. He added they have several options.
German Efromovich, the Group's Bolivian-born founder, will visit India next month to discuss investment options with Jet Airways' lenders and domestic InfraCos. "The amount of investment by the Synergy Group will depend on discussions and negotiations with banks and other creditors. In insolvency cases, it is common to negotiate for discount on debt," said Guizzetti.
Meanwhile, the grounded airline's liabilities continue to mount. As per earlier claims, Jet Airways had liabilities of over Rs 26,000 crore, which has now reportedly shot up to Rs 30,558 crore. Of the total claims, the RP has admitted Rs 12,555 crore worth of claims.
Given that Efromovich himself is mired in financial troubles - his wholly-owned carrier Avianca Brasil was grounded by Brazil's civil aviation regulator in May following the company's filing for bankruptcy late last year and around the same time he was ousted from the chairman's post of Avianca - doubts are raised about his interest in Jet Airways. Efromovich is now waging a legal battle to retain control of his majority stake in Avianca after defaulting on a $456 million loan from US airline United Airlines, which the businessman had secured with his Avianca shares.
Guizzetti, however, claims that the Synergy Group boasts the funds to bid for Jet Airways, adding that a business plan is being prepared. As proof, he cites that Efromovich had offered to invest around 300 million euros for a 30 per cent stake in troubled Italian carrier Alitalia earlier this year but lost out in the race. "Efromovich has been looking to diversify his investments and had earlier looked at investing in TAP Air Portugal. He knows the aviation business well," Guizzetti explained.
In a regulatory filing on Tuesday, Jet Airways announced September 3 as the date of issue of provisional list of prospective resolution applicants and it hopes to issue the final list of prospective resolution applicants on September 12. The last date for submission of resolution plans is October 14, unless the timelines are rejigged yet again in the days to come.
With Reuters inputs