Jet Airways shares jump up to 9% on report of founder Naresh Goyal to sell controlling stake

Jet Airways' financial woes have been worsened by rising crude oil prices and intense pricing competition in the domestic aviation industry

Reuters November 28, 2018 12:39:50 IST
Jet Airways shares jump up to 9% on report of founder Naresh Goyal to sell controlling stake

Shares of India’s Jet Airways Ltd rose sharply on Wednesday following a report that founder Naresh Goyal has agreed to sell his controlling stake and give up operational control of the struggling carrier.

Although Goyal has been reluctant to relinquish his controlling stake in the 25-year-old airline, he is said to have met all three prospective buyers - Tata Group, Etihad Airways and a consortium of Air France - KLM and Delta Air Lines Inc, television news channel CNBC TV18 reported, citing multiple sources familiar with the matter.

Jet Airways shares jump up to 9 on report of founder Naresh Goyal to sell controlling stake

Representational image. Reuters .

“Goyal has agreed to sell controlling stake in the company to an investor and has communicated the same to three strategic investors they are talking to at this point,” the report quoted the sources as saying.

The report did not say whether a specific buyer was chosen.

Goyal has, however, laid out certain conditions including retaining a minority stake of below 5 percent and a board seat on the firm, the report added.

The carrier’s financial woes have been worsened by rising crude oil prices and intense pricing competition in the domestic aviation industry.

Investors welcomed the news, sending the airline’s shares up by nearly 9 percent in their biggest intraday percentage gain in nearly two weeks.

The stock saw a surge in its volume, falling just short of the 30-day average amount of shares - 15.5 million - in the first half of session.

About 14 million shares changed hands in the first half of session, compared with the 30-day average of 15.5 million.

Jet, which is 24 percent owned by Etihad Airways, did not immediately respond to a request seeking comment.

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