The Synergy Group, the sole suitor for Jet Airways, met with government officials on Wednesday to discuss the revival of the grounded airline. The group, promoted by Bolivian-born German Efromovich, sought assurance from the government on recovery of Jet’s slots. The government sought clarity whether the group’s business proposal was compliant with Indian foreign direct investment (FDI) rules, sources said.
“Officials from the ministry of civil aviation (MoCA ) met with the group’s representatives on Wednesday. The Synergy Group mainly sought assurance on the return of Jet’s slots. In response, the government gave an assurance that reallocating the slots should not be an issue post March,” a person aware of the developments told FE.
The Synergy Group will also send a technical team to evaluate Jet’s assets, sources indicated to FE. The slots of Jet Airways, which has been grounded for the past five months, have been reallocated to other airlines till March 2020.
The government, however, has serious concerns on whether the investment from the Synergy Group will comply with Indian FDI rules, as the group is yet to find an Indian partner. As per the Indian FDI regulations, a foreign airline can directly invest up to 49% in a scheduled Indian carrier. However, the rule applies only to those entities which directly own an airline. If the foreign entity is an investment arm, private equity, fund, bank, or an industry conglomerate, FDI can go up to 74%, which is the maximum permissible investment that can be held by a foreign investor provided it is explicitly not an airline. “The Synergy Group has informed the government that it is looking for Indian partners and their legal team is looking for ways to resolve the concerns regarding FDI,” the source said.
Last week, FE reported that the resolution professional (RP) for Jet Airways has approached at least two Indian companies to partner with the Synergy Group to invest in the grounded airline. Independently, Synergy Group has also held talks with some Indian entities.
19/09/19 Anwesha Ganguly/Financial Express
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“Officials from the ministry of civil aviation (MoCA ) met with the group’s representatives on Wednesday. The Synergy Group mainly sought assurance on the return of Jet’s slots. In response, the government gave an assurance that reallocating the slots should not be an issue post March,” a person aware of the developments told FE.
The Synergy Group will also send a technical team to evaluate Jet’s assets, sources indicated to FE. The slots of Jet Airways, which has been grounded for the past five months, have been reallocated to other airlines till March 2020.
The government, however, has serious concerns on whether the investment from the Synergy Group will comply with Indian FDI rules, as the group is yet to find an Indian partner. As per the Indian FDI regulations, a foreign airline can directly invest up to 49% in a scheduled Indian carrier. However, the rule applies only to those entities which directly own an airline. If the foreign entity is an investment arm, private equity, fund, bank, or an industry conglomerate, FDI can go up to 74%, which is the maximum permissible investment that can be held by a foreign investor provided it is explicitly not an airline. “The Synergy Group has informed the government that it is looking for Indian partners and their legal team is looking for ways to resolve the concerns regarding FDI,” the source said.
Last week, FE reported that the resolution professional (RP) for Jet Airways has approached at least two Indian companies to partner with the Synergy Group to invest in the grounded airline. Independently, Synergy Group has also held talks with some Indian entities.
19/09/19 Anwesha Ganguly/Financial Express
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