Debt-laden Jet Airways likely to approach Tata Group to resume stake sale talks after financial condition worsens
While Jet Airways founder and chairman Goyal has been discussing a deal with Etihad Airways, talks with the foreign partner stalled over the latter’s demand that he step aside from his management role, sources said.
Jet Airways mulls to resume talks with Tata Group for stake sale as the cash-strapped airline is in need of funds
Goyal's discussion with Etihad Airways stalled over the latter’s demand that he step aside from management role
Tata Sons in November 2018 said stake buy possible if Goyal relinquished his board position
Naresh Goyal-led Jet Airways is likely to approach Tata Group again for stake sale consultations as the debt-laden airline's financial condition has worsened, said media reports.
While its founder and chairman Goyal has been discussing a deal with Etihad Airways, talks with the foreign partner stalled over the latter’s demand that he step aside from his management role, sources said, asking not to be identified as the discussions are private, a report in The Economic Times said. However, both Jet Airways and Tata Sons did not comment
In November 2018, Tata Sons had put up a condition at its board meeting to acquire Jet Airways stakes that the deal would be possible only if Goyal relinquished his board position, said a report in Business Standard.
The diversified Tata Group owns majority stakes in two airline joint ventures — Vistara and AirAsia India.
Tatas has 51 percent stake each in full service airline Vistara — a joint venture with Singapore Airlines — and budget carrier AirAsia India -- where 49 per cent is with Malaysia's AirAsia Berhad.
Media reports suggest that the parent company of Vistara, Tata-Singapore Airlines, was 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.
In October 2018, reports appeared that Tata Sons was mulling to purchase stake in Jet Airways and that the plans were at a very early stage.
When asked about reports that Tata Sons is in discussions with Jet Airways for purchasing stake, an airline spokesperson said the information is "totally speculative".
On 2 January, crisis-hit Jet Airways had defaulted on loan repayments to banks, according to a filing. The full service carrier has been grappling with financial woes for quite some time now and has been making delayed salary payments to staff.
"Payment of interest and principal installment due to the consortium of Indian Banks (led by State Bank of India) on 31 December, 2018 has been delayed due to temporary cashflow mismatch," the company said in a regulatory filing.
Jet Airways had to cancel over a dozen flights in December 2018 after some pilots reported "sick" over their unpaid salaries.
The loss-making airline has been defaulting on the payment of salaries to its senior management, pilots and engineers since August due to a severe cash crunch.
— With PTI inputs
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