New Delhi: Columbia's Synergy Group, the only potential bidder for India's iconic airline Jet Airways, and its founder German Efromovich have a credit default history, which has come to the notice of lenders of the bankrupt airline too, say banking sources. Efromovich, who built the sprawling Latin American conglomerate with his brother Jose, had lost his shipyard and airline businesses because of loan defaults.
The shipyard Estaleiro Ilha (EISA), which Efromovich acquired in 2003, had filed for bankruptcy in 2015. It had a secured debt of $294 million, according to an old report by a research firm Debtwire. Around the same time, his shipyards Maua and Brasa had ceased production. In another incident, BRW Aviation, a subsidiary of Synergy Group, had borrowed $456 million from United Airlines in November 2018 by using its equity in South American airline Avianca Holdings as collateral, but defaulted on the loan in May 2019. United Airlines had removed Efromovich from the post of chairman of Avianca, and appointed Roberto Kriete, head of Avianca's second-largest shareholder Kingsland Holdings, at the top post. Last year, his airlines in Brazil and Argentina had also filed for bankruptcy.
Earlier, the Supreme Court had instructed ArcelorMittal to clear off the loan dues in Uttam Galva and KSS Petron (the world's largest steelmaker had stakes in both the companies) to become eligible to bid for bankrupt Essar Steel. The promoters of bankrupt companies were also disallowed from bidding for their bankrupt assets, citing loan dues reasons. Essar group's Ruia family and Jaypee group were willing to clear off the debts in their companies to regain the control. Under Section 29A of Insolvency and Bankruptcy Code (IBC), the undischarged insolvents and wilful defaulters were not allowed to buy the bankrupt assets. But it is not clear whether the clauses in IBC is applicable to Synergy Group as its defaulted businesses have no connect with the lenders in India.
25/10/19 Nevin John/Business Today
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The shipyard Estaleiro Ilha (EISA), which Efromovich acquired in 2003, had filed for bankruptcy in 2015. It had a secured debt of $294 million, according to an old report by a research firm Debtwire. Around the same time, his shipyards Maua and Brasa had ceased production. In another incident, BRW Aviation, a subsidiary of Synergy Group, had borrowed $456 million from United Airlines in November 2018 by using its equity in South American airline Avianca Holdings as collateral, but defaulted on the loan in May 2019. United Airlines had removed Efromovich from the post of chairman of Avianca, and appointed Roberto Kriete, head of Avianca's second-largest shareholder Kingsland Holdings, at the top post. Last year, his airlines in Brazil and Argentina had also filed for bankruptcy.
Earlier, the Supreme Court had instructed ArcelorMittal to clear off the loan dues in Uttam Galva and KSS Petron (the world's largest steelmaker had stakes in both the companies) to become eligible to bid for bankrupt Essar Steel. The promoters of bankrupt companies were also disallowed from bidding for their bankrupt assets, citing loan dues reasons. Essar group's Ruia family and Jaypee group were willing to clear off the debts in their companies to regain the control. Under Section 29A of Insolvency and Bankruptcy Code (IBC), the undischarged insolvents and wilful defaulters were not allowed to buy the bankrupt assets. But it is not clear whether the clauses in IBC is applicable to Synergy Group as its defaulted businesses have no connect with the lenders in India.
25/10/19 Nevin John/Business Today
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