Synergy ready to take majority stake in Jet Airways with conditions

South American conglomerate Synergy Group Corp., one of the three likely investors for Jet Airways, is willing to take a majority stake in the grounded airline if lenders agree to take a deep haircut and convert their debt into equity, reported the Livemint.

“We are consulting lawyers and exploring (whether) Synergy Aerospace as a financial investor can take a majority stake in Jet Airways," Antonio Guizzetti, president of Washington-based Guizzetti & Associates, legal adviser to Synergy Group on the Jet Airways acquisition, told the paper in an interview.

The report further added that a plan to take a majority stake may, however, hit a regulatory hurdle as foreign airlines are allowed to buy a maximum of 49 per cent in a local airline. 

The Synergy Group owns a majority stake in Colombian carrier Avianca Holdings, which has a codeshare partnership with Air India.

Jet Airways, which is undergoing insolvency proceedings, had failed to attract any new bidders during the extended deadline period for submission of initial bids.

The third deadline for submission of Expression of Interest (EoI) ended on August 31. With no new bidders emerging during this period, there are only three entities that had put in their initial bids earlier.

Besides Synergy Group, Russian Fund Treasury RA Partners and Panama-based investment firm Avantulo Group also had submitted the EoIs.

On August 26, Jet Airways' Committee of Creditors (CoC) extended the deadline for submission of EoIs.

It was the third time that lenders extended the deadline after the ones on August 3 and 10.

In the second round of submission of EoIs, which closed on August 10, the lenders received interest from energy baron Anil Agarwal's family trust-backed Volcan Investments, Russian Fund Treasury RA Partners and Avantulo Group.

However, Volcan opted out of the race a day after publicly announcing its interest in Jet Airways.

After the August 10 deadline, Synergy Group Corp reportedly evinced interest in the airline.

Etihad Airways, which owns 24 percent stake in Jet Airways, did not submit any bid.

In June, Ashish Chhawchharia was appointed as the resolution professional to manage the affairs of Jet Airways, which shuttered operations in April.

The airline has liabilities worth over Rs 26,000 crore. 

With inputs from PTI