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Wed 11 Sep 2019 10:54 AM

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Russian bidder for Jet Airways may be disqualified

Russian investment fund fails to comply with

Russian bidder for Jet Airways may be disqualified
As per India’s foreign direct investment (FDI) policy for the aviation sector, no foreign airline is allowed to hold more than 49 percent equity stake or have controlling right of any Indian carrier.

Efforts to revive the grounded Indian carrier Jet Airways has hit another air pocket, with one of the two bidders in the fray – Treasury RA Creator, a Russian investment fund –understood to have failed to deposit the mandatory deposit required to access the airline’s data.

Failure to deposit the mandatory deposit could lead to disqualification of the Russian investment fund, aviation industry sources said.

“Treasury RA Creator did not provide enough information about itself to Jet Airways’ Insolvency Resolution Professional (IRP) nor did it deposit the mandatory amount required to seek access to the airline’s data, making it ineligible to bid,” Mint reported, quoting undisclosed sources.

Treasury RA Creator - the Treasury of the Creator RA, the name according to its website -  is an international financial organisation designed to promote economic growth, expand trade and economic relations between countries and develop integration processes through investment activities, according to the information provided on the Russian fund’s website.

Aviation industry analysts said the bid by the South American conglomerate Synergy Group Corp – the other bidder for Jet Airways - did not seem to be serious as the company is yet to approach any company or investor group in India for forming a partnership.

As per India’s foreign direct investment (FDI) policy for the aviation sector, no foreign airline is allowed to hold more than 49 percent equity stake or have controlling right of any Indian carrier.

Synergy Group Corp owns a majority stake in Colombian carrier Avianca Holdings, the second-largest airline in South America.

Banking sources said the State Bank of India (SBI)-led lenders’ consortium to Jet Airways is currently in the process of conducting a due diligence on Synergy Group Corp before deciding on its eligibility to bid.

The SBI spokesperson was not immediately available for comment on the issue.

Panama-based Avantulo Group, Treasury RA Creator and Volcan Investment, the family Trust of London-based Indian billionaire businessman Anil Agarwal, were the three investor groups that submitted Expression of Interest (EoI) for the debt-ridden Indian carrier by the August 10 deadline fixed by the Interim Resolution Professional (IRP) appointed for Jet Airways.

Synergy Group Corp entered the fray after the deadline was over.

Volcan Investment later backed out from bidding, while Avantulo Group is understood to have been found ineligible by the lenders’ consortium earlier.

Abu Dhabi-based Etihad Airways, which holds 24 percent equity stake in Jet Airways, did not submit the EoI for the airline, citing unresolved issues related to Jet’s liabilities.

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