Thursday, August 29, 2019

After EOI submission, Synergy Group eyes 49% stake in Jet Airways

Mumbai: South America’s Synergy Group Corp is planning to pick up 49 per cent stake in Jet Airways. It will discuss co-investment options with its lenders and infrastructure companies, the group’s advisor told Business Standard. Synergy Group Corp, which owns majority stake in Avianca Airlines, South America’s second-largest airline, submitted an expression of interest last week to revive the grounded airline.

It’s Bolivian born founder German Efromovich will visit India next month to discuss investment options with Jet’s lenders and Indian infrastructure companies. Government norms mandate that substantial ownership and effective control of an airline must rest with Indian citizens.

“We intend to structure the acquisition as a foreign company with 49 per cent stake. Jet Airways is publicly listed and we hope lenders would be willing to convert their debt into equity. We will also discuss partnerships with Indian infrastructure companies. We have several options,” said Antonio Guizzetti, president of consultancy G&A, which is advising the Synergy Group regarding the stake buy.

Jet Airways, which shut down in April following a cash crunch, had a debt of around Rs 8,500 crore. Ashish Chhawchharia, the resolution professional handling the airline’s insolvency, has received creditor claims of over Rs 30,000 crore and admitted claims of around Rs 12,000 crore.

ALSO READ: Jet Airways crisis: Lenders extend expression of interest deadline again

“The amount of investment by the Synergy Group will depend on discussions and negotiations with banks and other creditors. In insolvency cases, it is common to negotiate for discount on debt,” he said.

Efromovich purchased Avianca, which went through bankruptcy in 2004. Since then, he has transformed it into the second largest airline in South America.

However, Efromovich is facing a crisis and had to step down from the chairman’s post of Avianca Holdings following a loan default. He is now waging a legal battle to retain control of his majority stake in Avianca after a loan default.
28/08/19 Aneesh Phadnis & Subrata Panda/Business Standard

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