Jet Airways, India’s oldest private airline, had to witness significant hardships as they ran out of cash and banks refrained from lending them any monetary help. But now with Synergy Group and two other bidders, a ray of hope has emerged.
Jet Airways became India’s second high-profile aviation casualty in a decade after Kingfisher’s demise in 2012. Unfortunately, the prestigious Naresh Goyal-promoted airline ran out of fuel and had to seize operations in April.
So, in a final statement, Jet Airways said, “Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights.”
Synergy Group’s bid to revive Jet Airways has now been given fresh thrust.
It’s been over six months since the calamity, but now there’s finally a ray of hope. Since then, a higher official of Jet has been in talks with South America’s Synergy Group to back the airline’s resurgence.
Synergy Group’s Interest is Good News for Jet Airways
The Synergy Group of South America already owns a significant share in Avianca Airlines, which is the second-largest in Latin America. The interest from Synergy is concrete and the Aviation ministry is already mulling over their draft bid.
While they had initially failed to find a local partner in the rescue bid, they have now quickly emerged as the favourites. That said, Synergy Group needs a local partner as the Indian law does not permit foreign companies to hold more than 49% stake in any local airline.
The Indian Partner helping the Synergy Bid
As per reports, Synergy Group is in talks with Ravi Deol, a UK-born Indian businessman to move the deal further. Deol has also Howbeen making efforts to get in and help kick start Jet Airways for quite some time now.
Synergy Group is in talks with Ravi Deol, a UK-born Indian businessman.
Another business group approached by the South American conglomerate, is an Indian aviation management company, the Bird Group. But that too is not final.
Can Synergy Group avoid Etihad-like failure?
However, the dates for stamping the Jet Airways revival deal are being pushed again and again. Back in May 2019, Etihad was on the verge of saving Jet Airways. However, unable to find an Indian partner willing to take on a majority stake, Etihad’s attempt floundered.
However, Synergy Group is optimistic about avoiding a similar fate. Other parties also interested initially were Indigo Partners, TPG Capital and India’s National Investment and Infrastructure Fund. But none followed through.
Only interested entity with Aviation expertise
So, Synergy Group’s founder Germán Efromovich is keen to buy a significant stake in the Indian airline and revive it. Furthermore, reports observe that the Synergy group is looking to include 12 domestic and 13 international banks and institutions so that the cut can go above the required 50 per cent.
Synergy Group also announced multiple times that it has prepared a business strategy for Jet Airways. The company has also asked the lenders of the airlines to turn 10 to 20 per cent of their total debt into equity. Synergy is also planning to agree on a non-disclosure pact with the lenders.
Synergy Group-led Jet Airways will be a consolidated Airline
The Synergy Group has also proposed the idea to cut the number of employees by half if they acquire Jet Airways. Moreover, around 14 thousand employees see the group as a ray of hope. Thousands of Jet employees are stuck in limbo with job uncertainty and also pending salary payouts.
Thousands of Jet Airways employees are stuck in limbo with job uncertainty and pending salary payouts.
Although Synergy’s efforts and desire to revive Jet airways is concrete, their potential is still in doubt. On the other hand, if there was any hope for Jet airways, experienced investors with potential would have swooped in long ago.
Final Fate of Jet Airways to be Decided in Near Future
Synergy Group also has its own set of problems. Moreover, with the December 16 deadline already passed, it will have to resubmit the proposal. As per reports, a Synergy representative will now meet National Company Law Tribunal to explain the plan for Jet Airways revival.
Synergy also wants clarity on issues regarding slots at different airports. Consequently, DGCA and Ministry of Civil Aviation will need to resolve them. However, apart from Synergy Group, two new entities have reportedly joined the race to revive Jet Airways.
Fresh bidding process to kick off on December 20th
So, now with the 180-day deadline for corporate insolvency resolution process (CIRP) over, fresh bids will have to be made. Furthermore, the new interested entities are from West Asia and an Indian-entity backed by a UK investor.
So, a vote will happen at the next CoC meet on December 20th to start the bidding process afresh. Synergy Group and also the other two interested entities will have 15 days to submit expressions of interest to revive Jet Airways.