Russian fund on the way out, Jet’s revival hopes fade

THE RUSSIAN FUND TREASURY RA CREATOR IS ON THE VERGE OF BEING DISQUALIFIED AS IT DIDN’T GIVE ENOUGH INFO ABOUT ITSELF

MUMBAI/NEW DELHI: Chances of a late-stage revival of Jet Airways (India) Ltd have faded further, with Russian fund Treasury RA Creator on the verge of being disqualified, leaving South America’s Synergy Group as the sole suitor for the grounded airline.

Treasury RA Creator did not provide enough information about itself to Jet Airways’ insolvency resolution professional nor did it deposit the mandatory amount required to seek access to the airline’s data, making it ineligible to bid, the person cited above said on condition of anonymity.

“Though the committee of creditors (COC) of Jet Airways is yet to take a call on whether to disqualify Treasury RA Creator, the company’s interest in Jet Airways, as things stand, is as good as being rejected,” said the person.

Meanwhile, lenders are still conducting due diligence on South American conglomerate Synergy Group Corp. after it showed interest in investing in Jet Airways. The company, which owns a majority stake in Colombian carrier Avianca Holdings, the second-largest airline in South America, is looking for a majority stake.

“There is only a slim chance that Synergy Group Corp. will be allowed to bid for Jet Airways,” the person said, adding that it cannot bid without support from an Indian partner, according to the current foreign direct investment (FDI) regulations.

At present, a foreign airline can own up to 49% stake in an Indian carrier, but cannot have controlling rights. Synergy Group is yet to approach an Indian entity to partner it in jointly bidding for Jet Airways.

The finance minister said in the Union budget that the government is examining proposals to ease the FDI cap in aviation. “Synergy is yet to make the mandatory deposit; so it’s difficult to open the data room for the company, though it is considered a turnaround expert in South America,” the person said.

Antonio Guizzetti, president of Washington-based Guizzetti and Associates, and legal adviser to Synergy Group on the Jet Airways acquisition, wasn’t available for comment.

Mint reported on September 3 that Synergy was ready to take a majority stake in Jet Airways, provided the grounded airline’s lenders agreed to take a deep haircut and convert their debt into equity.

“We are consulting lawyers and exploring (whether) Synergy Aerospace as a financial investor can take a majority stake, up to 51%, in Jet Airways,” Guizzetti had said in a phone interview.

A lawyer who specializes in aviation deals had told Mint that “a foreign non-airline can only nominate less than half the board members”.

“It will be difficult for Synergy Group to have a controlling stake in Jet Airways,” said the lawyer, requesting anonymity.

Germán Efromovich, founder and CEO of Synergy Group, will travel to India on 15 September to meet the lenders of Jet Airways.