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Jet Airways crisis: Synergy Group, Prudent ARC submit EoIs; Hinduja Group backs out

BusinessToday.In     January 15, 2020

South America-based Synergy Group and Delhi-based Prudent ARC Limited are the two companies that have submitted EoIs (Expressions of Interests) for the beleaguered airline Jet Airways Limited.

The Hinduja Group, earlier considered as a major contender for the now-defunct airline, has backed out from bidding, Mint reported. Subject to their eligibility, the Jet Airways lenders are expected to get binding bids on February 17, the report, quoting an unknown source, said.

With just two investors coming up with EoIs, the task to revive Jet Airways looks difficult, suggest experts.

Synergy Group Corp had earlier sought more time to complete the due diligence before submitting the final bid. The South American conglomerate, which owns majority shares in Colombian carrier Avianca Holdings, is understood to have held discussions with the Bird Group for investment into the ailing airline. Bird provides aviation management and other services in India and abroad.

Additionally, the government, during its meeting with Synergy Group, had reportedly asked it to comply with India's Foreign Direct Investment (FDI) rules, as per which a foreign airline can only invest up to 49 per cent in a domestic carrier.

It is unlikely that lenders will accept a bid from Prudent ARC, an asset reconstruction company, as its total assets don't match the Rs 2,000-crore eligibility criteria. As per the requirement set by Jet Airways' creditors, an eligible bidder must have a net worth of Rs 1,000 crore. However, for financial investors, the eligibility limit is Rs 2,000 crore.

The airline stopped operations on April 17 after it ran out of funds and was admitted for insolvency on June 20. It has been grounded for nearly eight months now and the slots allotted to it have been re-allocated to other airlines. The creditors have filed Rs 30,907 crore worth claims in the airline.

Also read: Creditors likely to recover only $300-$400 million in liquidation scenario

Also read: RP Ashish Chhawchharia hoping for the best even as experts remain sceptical

Also read: Synergy Group consents to pick 51% stake in grounded airline if lenders take a deep haircut

Edited by Manoj Sharma

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