The board of Tata Sons is likely to meet Friday to discuss a proposal to take over the Naresh Goyal-controlled Jet Airways, which is looking for investors to tide over liquidity crunch that it has been saddled with, according to people familiar with the development.
Airline’s deputy chief executive and chief financial officer Amit Agarwal earlier this week had admitted that the company was in talks with “multiple interested parties” for fund infusion as well as selling six of its Boeing 777 planes and a stake in its loyalty progarmme Jet Privilege.
“Tata Sons board is meeting tomorrow (Friday) to consider the proposal to bid for Jet Airways,” people in the know of the development told PTI.
While a spokesperson of Tata Sons, which already runs two airlines– the full-service carrier Vistara in a JV with Singapore Airlines, and the low-cost carrier AirAsia India in JV with Air Asia of Malaysia, refused to comment on “speculation,” Jet did not respond to PTI queries on the same.
“We do not comment on speculation,” a Tata Sons, which originally owned the present national carrier Air India, spokesperson said when asked for confirmation.
Besides Goyal, who along with his family owns 51 percent stake in the carrier, Gulf carrier Etihad Airways holds 24 percent stake in the cash-strapped airline which earlier this week reported Rs 1,261 crore loss for the September quarter against a profit of Rs 71 crore y-o-y, making it the third straight quarters of heavy losses.
This had the airline also putting as many as six of its Boeing 777s on sale to part-fund liquidity.
Media reports suggest that the parent company of Vistara, Tata-Singapore Airlines, is looking at all-stock merger with Jet Airways as part of the Tata group’s plans to board Goyal’s full service carrier.
In an exchange filing, Jet Airways described the media reports as speculative. “…the subject news is speculative in nature and that there is no discussion or decision in the board which would require a disclosure…,” the airline informed BSE.
According to reports, the two sides are inching towards a two-step transaction that would first see Jet Airways merging with Tata-SIA that runs Vistara through a share swap to form a new JV, which will have the Goyal family, Etihad, Tata Sons and Singapore Airlines as its partners.
“We are currently at various stages of discussions with multiple interested parties for both part stake sale in Jet Privilege and fresh equity infusion,” Agarwal had told analysts during the post-earnings conference call Tuesday.
He had also said the company hired investment bankers and consulting firms to carry out these tasks.
The cash paucity in the country’s second largest airline by market share has resulted in delayed payments to some vendors and salaries to a section of its over 16,000 employees.
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