While the earlier update on the ailing airline company Jet Airways was that the South American business group Synergy Group Corp is in the race to take over with some conditions, a fresh report claims there is another entity in the fray. This report by the business news channel CNBC- TV18 claims it has accessed documents to indicate that the Synergy Group Corp and Treasury RA Creator from Russia have since been shortlisted by the resolution professional or RP.
In the revised scheme of things in dealing with debt-ridden companies seeking insolvency or where the cases get referred to the National Company Law Tribunal, a Committee of Creditors (CoC) is formed. The lender having maximum exposure in the troubled firm will normally head the Committee and a Resolution Professional (RP) is appointed to coordinate between the various stakeholders in resolving the issue. It is the RP, the small creditors approach, to have their issues resolved. It is the RP who holds discussions with prospective suitors for taking over the sick unit. These talks are held within the mandate given by the CoC.
Ultimately, each lender is interested in recovering as much of the funds they had sunk in the company as they can. The investor wanting to take over will try and avoid paying back the old debts and will want to invest in turning the company around. This tug-of-war will happen all the time.
Coming back to the Jet Airways case, the RP will be holding meetings with the South American company as well as the Russian party. As reported earlier, German Effromovich, the founder of the Synergy Group is likely to be in India and will meet the RP and possibly the State Bank of India officials, on September 15. It is not known if the date for the meeting with the Russian entity, Treasury RA Creator, has been fixed.
While all fingers are crossed for this one, government-owned Air India is also up for sale. The Civil Aviation Minister had confirmed that the government was willing to look at relaxing the shareholding norms in airlines if that is coming in the way of disinvestment in Air India.