Jet Airways insolvency: Synergy Group seeks more time to put in final bid for airline

The Synergy Group, led by German Efromovich has now said it wants time till November 30 to submit its bid to take over the airline.
Jet Airways insolvency: Synergy Group seeks more time to put in final bid for airline
Jet Airways insolvency: Synergy Group seeks more time to put in final bid for airline
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Though it appeared as if the only way the Jet Airways insolvency case would go could be liquidation, the latest report by the Resolution Professional (RP) to the National Company Law Tribunal (NCLT) suggests there may be a small ray of hope for a resolution. The only source, as of now, that gives this hope is the Synergy Group from South America. The RP of Jet Airways has said the investor is seeking more time.

The report by the RP to the NCLT says the Synergy Group is currently in the process of conducting due diligence. They have been provided access to the airline’s books of accounts. The Synergy Group, led by German Efromovich has now said it wants time till November 30 to submit its bid to take over the airline.

There are some issues for the authorities in extending this date beyond October 31. One is the Committee of Creditors (CoC) may not be keen to have the issue dragged beyond October 31. The other is the the final resolution plan was to be put before the NCLT by October 28. November 30 may also be too close to the December 16 deadline of 180 days for completing the corporate insolvency resolution process (CIRP) at the NCLT.

The third issue relates to the allotment of slots to the different airlines in the country’s airports by the civil aviation authorities. The current allotments hold good till March 2020. The slots earlier used by Jet Airways have since been allotted to other airlines. If Jet Airways is being revived, then the slot allocations for the summer season will have to re redone. This has to be completed in October itself since the airlines would want the time to make changes at their end.

The ball is now in the courts of the NCLT and the CoC. Assuming they agree to the time extension till November 30, and the Synergy Group does come up with a bid, will the government dilute the 49% clause? Foreign entities with interests in the airline industry cannot hold more than 49% in an Indian carrier. The Synergy Group is very much into the airlines business operating the second biggest airline in South America.

One key issue for the South American company has been that it has not been able to rope in an Indian partner so far.   

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