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Jet just got a new savior from Colombia

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The Economic Times
25th August, 2019 23:42 IST

MUMBAI: Synergy Group Corp, a South American conglomerate that owns majority shares in airlines including Colombian carrier Avianca Holdings, has shown exploratory interest in investing in Jet Airways, said a person aware of the development.

The conglomerate submitted an expression of interest for the bankrupt and grounded airline after the August 10 deadline set by the resolution professional running the bid process. The RP, Ashish Chhawchharia of Grant Thornton, will seek approval from the committee of Jet’s creditors to include Synergy in the race on Monday, he told ET.

The RP was appointed by India’s bankruptcy court after it admitted an insolvency plea from Jet’s top lender, State Bank of India, on loan repayment defaults. The committee of creditors was formed as part of the resolution process.

The RP has collated claims from all creditors and is in charge of finding a new investor for the airline to clear its dues and give it a new life. Jet halted operations on April 17 after running out of cash and failing to raise money to stay afloat.

The RP had received three EoIs for Jet as of August 10 – from Volcan Investments, which is billionaire Anil Agarwal’s family trust; Panama-based investment firm Avantulo Group, and Russian Fund Treasury RA Creator.


Volcan withdrew a day later and Avantulo wasn’t shortlisted for the next round of bidding, leaving the Russian fund the only selected entity.

An email to an Avianca spokesperson who looks at matters pertaining to the parent company remained unanswered as of press time.

While Jet’s creditors have put in claims for Rs 30,558 crore, the RP has admitted Rs 12,555 crore, rejected Rs 11,996 crore and is verifying the remaining amount.

The Synergy Group owns majority of Avianca Holdings formed in 2010 via the merger of Colombia’s Avianca and El Salvador’s TACA Airlines. It is Latin America’s second-largest airline, after Chilean carrier LATAM Airlines.

Avianca Holdings is loss-making and itself being restructured, including a change in management team, a phase out of aircraft and network optimisation.

Synergy chairman Germán Efromovich’s holding company, BRW Aviation, defaulted on a $456-million loan from United Airlines earlier this year, according to media reports. United’s loan was backed by Efromovich’s 51.5% stake in Avianca, the reports said. United, which has proposed a three-way business agreement with Avianca and Panama’s Copa Airlines, sought to remove Efromovich from his position of control at Avianca, the reports said.

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