The final bidder for beleaguered Jet Airways, Synergy Aerospace Group, has reportedly been granted an extension to the deadline for a resolution plan to be formed. The Group asked for an extension to the 14th October deadline over the weekend, and late on Monday was granted another month. This will push the decision on Jet Airways very close to the 180-day deadline for completing the corporate insolvency resolution process, which will end on December 16th.
Deadline extended again
As reported in the Financial Express today, the committee of creditors has reportedly agreed to give the Synergy Group more time to finalize its resolution plan. According to reports, the Group has been given a new deadline of the 15th November to firm up details of its bid. A source told the publication,
“The Synergy Group is still doing due diligence. They had a video conference call with Jet’s management on Monday to understand which all routes they can begin operations from once the airline is revived. Lenders are hopeful, so some more time has been given.”
Based in Colombia, Synergy Group has its hands tied in terms of investing in Jet Airways. The failed airline’s creditors are looking to offload 100% of the airline, but foreign investors are not allowed a majority shareholding in any Indian company.
However, it looks as if Synergy may have found a solution, as it is reportedly in talks with India’s Bird Group, a decades-old company providing aviation management services, amongst other things. Taking the new deadline date into account, it is likely to be well into December before we find out the final fate of Jet Airways.
The only investor left standing
Having been grounded since April 17th, Jet Airways has been clinging on to its last shred of hope for half a year now. Its creditors, although unwilling to give the airline any more money, have been holding out in the hope of a rescue investor coming forward to buy the struggling carrier.
Over the months, various interested parties have been floated around, but one by one they have all backed off, leaving just one final investor remaining. Synergy Group, a South American investment company with interests in airlines already, is the only bidder left standing in the process, and they are not keen to move things along too quickly.
Back in early October, Simple Flying reported that entrepreneur Germán Efromovich, the founder and owner of Synergy, had visited a Jet Airways hangar and met with employees of the airline. However, no further contact had been made, and it was noted at the time that the Group had until 14th October to submit a resolution plan to lenders.
However, even last week it seemed improbable that this deadline would be met. On the 9th October, the Economic Times of India reported that the airline’s resolution professional Ashish Chhauchharia suggested Synergy was still undertaking due diligence and would be likely to request an extension.
With reports today that the extension has been granted, the saga of Jet Airways continues.
Limited time remaining
Jet Airways was admitted for insolvency on the 20th June. Indian law states that the corporate insolvency resolution process (CIRP) must be completed within 180 days. This gives the airline until the 16th December to put a rescue plan in place or face full liquidation.
Efromovich could be a worthwhile bidder. Despite dragging his heels so far, he has a track record of investing in failing airlines. In 2004, he bought bankrupt Avianca, which has gone on to become Latin America’s second-largest carrier. He also previously tried to buy Alitalia.
Aside from setting a record for the longest time floundering on the brink of bankruptcy, this final ray of hope could turn out to be a lifeline for the failed airline and the 20,000 plus workers it used to employ.