Thursday, January 16, 2020

Jet Airways insolvency: The good, the bad and the ugly

The good news. Jet Airways has got an expression of interest (EoI) from two suitors - South America’s Synergy Group and New Delhi-based Prudent ARC Ltd.
The bad news? Many of the questions around the revival of the airline still remain.
While Synergy submitted its interest on January 6, little-known Prudent ARC put in the EoI on January 15, the deadline.
The interest would come as a relief for Jet Airways lenders, who are hoping to recover more than Rs 8,000 crore in dues. The airline’s total liability is over Rs 20,000 crore. The airline suspended operations in April.
The two suitors will now go through the eligibility test. If they clear the hurdle, they will need to submit bids by February 17.
For Synergy, which emerged as the sole suitor for Jet Airways in September, this would be familiar territory. In 2019, too, the group submitted its EoI but failed to submit a bid despite several extensions in deadlines.
Importantly, many of the questions around its interest remain.
It still has not got an Indian partner, which is necessary to qualify as a bidder. Indian regulations allow foreign companies only 49 percent stake in airlines, and the operational control also remains with the local partner. Despite reaching out to many companies, Synergy is yet to get a partner.
16/01/20 Prince Mathews Thomas/moneycontrol.com

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