German Efromovich, the founder and promoter of the Synergy Group from South America is in India busy meeting the stakeholders to explore if his group can take over Jet Airways. According to a report from Financial Express, Efromovich met with officials in the Ministry of Civil Aviation. From Synergy’s side, the request was for Jet’s slots at airports be restored for operations.
The civil aviation ministry reportedly wanted to know how the Synergy Group intended to invest in Jet without flouting the FDI guidelines. Earlier reports had suggested that the Resolution Professional had referred two Indian companies who could partner with Synergy Group.
The FE report indicates that the South American company is also independently scouting for Indian partners to get over the 49% cap for FDI in airline companies if the foreign entity is already in the airline business. It is said Efromovich has assured the authorities that they will work around this issue. The due diligence exercise in scrutinizing the books of Jet Airways is currently on.
Jet Airways shut down its operations this April after severe fund crunch and is now undergoing insolvency with National Company Law Tribunal. The lenders have been pressing their claims and the RP has been making efforts to find a buyer who can revive the company. After receiving a few expressions of interest, it all came down to Synergy Group. The group’s and Efromovich’s reputation is that they took over a sick airline Avianca in South America and turned it around. The airline is now the second largest in that continent.
Earlier, after arriving in India the team from the Synergy Group has held meetings with the lenders to Jet Airways. State Bank of India is the major lender along with Yes Bank and IDBI Bank. Efromovich wants them to take huge haircuts. It is understood that while the airline will be put back into operation once taken over, the scale of the business may be smaller, at least to start with.
For the record, when Jet Airways shutdown, creditors made claims to the tune of Rs 30,000 crore but so far, only Rs 12,000 crore (approx.) have been accepted of which the financial creditors are owed around Rs 8,000 crore.