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Mon 26 Aug 2019 11:51 AM

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South American group expresses interest in grounded Jet Airways

Rio de Janeiro-headquartered Synergy Group is a majority stakeholder in the Colombian carrier Avianca Holdings

South American group expresses interest in grounded Jet Airways
Aviation industry analysts, however, were sceptical about Synergy Group Corp’s seriousness about investing in Jet, at a time when the Columbian carrier Avianca itself is facing serious financial troubles.

South American conglomerate Synergy Group Corp is understood to have shown interest in investing in grounded Indian airline Jet Airways, despite aviation industry analysts seeing little hope for a revival of the debt-ridden carrier.

Synergy Group Corp submitted an expression of interest (EoI) for Jet Airways after the August 10 deadline set by the Interim Resolution Professional (IRP) for the carrier, according to a report in Economic Times.

The Committee of Creditors for Jet Airways is expected to consider the EoI by Synergy Group Corp in its meeting on Monday, after the IRP referred the matter to it, industry sources said.

“The Committee of Creditors is slated to meet today (Monday) to discuss some of the issues related to Jet Airways, including the issue of extending additional interim financial support to the airline for its maintenance, a State Bank of India official, who did not wish to be identified, told Arabian Business.

The SBI official, however, declined to comment on whether the EoI by Synergy Group Corp will be discussed at today’s meeting of the Committee of Creditors.

The IRP for Jet Airways received three EoIs for Jet before the August 10 deadline – from Volcan Investments, the family Trust of Vedanta Group promoter Anil Agarwal, Panama-based investment firm Avantulo Group and Russian Fund Treasury RA Creator.

While Volcan Investments has backed out after submitting its EoI, the Avantulo Group was found to be ineligible by the IRP to bid for Jet Airways.

Etihad Airways, which holds 24 percent stake in Jet Airways, however, did not submit an EoI, saying that it has decided not to reinvest in the airline due to unresolved issues concerning its liabilities.

The Rio de Janeiro-headquartered Synergy Group Corp is a majority stakeholder in the Colombian carrier Avianca Holdings.

The group, owned by Germán Efromovich, also has presence in oil and gas exploration and hydroelectric power plants, according to the company site.

Sceptical

Aviation industry analysts, however, were sceptical about Synergy Group Corp’s seriousness about investing in Jet, at a time when the Columbian carrier Avianca itself is facing serious financial troubles.

“While there may be a suitor, one has to ask the question as to what exactly they will be buying,” Saj Ahmad, chief analyst with StrategicAero Research, told Arabian Business.

“Nearly all of Jet’s airplanes are gone, so are the slots, the staff are dispersed and there is nothing left but a mountain of debt,” Ahmad added.

Aviation industry experts also pointed out that for the last 5-6 months since Jet was grounded – the carrier suspended all its operations on April 17 - not a single entity has shown any interest in acquiring it.

“Given the long delay in the sale of Jet, it will be difficult to find any credible buyers for the airline. It would be a big challenge to revive the airline now,” Dhiraj Mathur, former Partner of PwC India and an aviation industry expert, told Arabian Business.

Meanwhile, the Interim Resolution Professional, in a regulatory filing on Monday, said the Indian Enforcement Directorate has conducted an inspection and search at the registered office of Jet Airways at Siroya Centre, Andheri, another office at Kaledonia Andheri, both in Mumbai, last Friday.

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