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Jet Airways crisis: Lenders extend expression of interest deadline again

The lenders have given in-principal nod for the extra sum but will have to approve it through a vote this week

Aneesh Phadnis & Subrata Panda  |  Mumbai 

Jet Airways
(Photo courtesy: Jet Airways)

lenders on Monday decided to extend the deadline for submission of the expression of interest (EoI) to August 31.

South America-based Synergy Group Corp had expressed interest in Jet last week and now the deadline has been extended to give another opportunity to a potential investor. The airline’s resolution professional is in talks with the new suitor, which has shown genuine interest in the defunct airline, said people in the know.

Earlier this year, the Synergy group also expressed interest in Italian carrier Alitalia. It is also expected that a few more EoIs may come in for within the extended deadline.

So far, the resolution professional had received EoIs from Panama-based Avantulo Group and a Russian fund called Treasury Creator. Anil Agarwal had also expressed interest in the airline and submitted an exploratory EoI for Jet but later pulled out of the race. However, only the Russian fund has been shortlisted so far, said sources.

ALSO READ: RP of Jet Airways wants NCLT to ask lenders for interim financing

Synergy Group Corp, founded by businessman German Efromovich, owns the majority stake in Avianca Airlines. Efromovich purchased Avianca, which went through bankruptcy in 2004, and has since turned around the carrier into South America’s second-largest airline. Avianca operates a fleet of 180 aircraft and serves over a hundred destinations in 28 countries with main operations in Colombia, Ecuador, and Peru, among other countries.

However, both the airline and its largest share owner are facing a crisis this year. The airline’s Brazilian unit ceased operations following a bankruptcy.

Efromovich, too, had to step down as the airline’s chairman following a loan default. The loan was taken by the Synergy Group by pledging its stake in Avianca as collateral.

ALSO READ: Govt allows airlines to use defunct Jet Airways' slots till year-end

“We do not have any information regarding the transaction you mentioned nor can we make any statements on behalf of any of our shareholders,” Avianca Airlines said in an emailed response.

The lenders on Monday decided to release the initial interim funding of $10 million for maintenance of Jet.

However, an application may still be filed in the National Company Law Tribunal asking the tribunal to direct the lenders to release funds. More funds have been sought from the lenders for recovery of the aircraft engines stuck in a maintenance unit over unpaid dues.

The lenders have given in-principal nod for the extra sum but will have to approve it through a vote this week.

The dispute with Luckystar, the owner of Jet’s HQs, has been settled. However, some issue with regard to the deposit money still needs to be sorted out. No settlement has been reached with HDFC with regard to an office space in Bandra-Kurla Complex, which was mortgaged for a loan of Rs 400 crore. Jet came under insolvency on June 20 despite the banks making efforts to find a suitor. It stopped flying on April 17. So far, Jet has received 18,596 claims, of which 13,911 have been admitted.

Revival work in progress

  • The resolution professional has received EoIs from Panama-based Avantulo Group and Russian fund Treasury Creator
  • Only the Russian fund has been shortlisted so far
  • Last week, South America-based
  • Synergy Group expressed interest in Jet
  • It is also expected that a few more EoIs may come in for within the extended deadline

First Published: Tue, August 27 2019. 00:58 IST
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