Jet Airways talks down Tata bid for stake
Airline dismisses as speculative reports that Tata Sons has begun due diligence
- Published 14.11.18, 1:05 AM
- Updated 14.11.18, 1:05 AM
- a min read
Amid reports that the Tatas have commenced due diligence to buy a controlling stake in the airline, the top management of Jet Airways on Tuesday said it has hired investment bankers for the infusion of fresh equity into the airline and a stake sale in its loyalty programme.
However, it termed as “speculative”, reports of Tata Sons beginning due diligence to acquire the airline. “The subject news is speculative in nature and there are no discussions or decision by the Board, which would require a disclosure under Regulation 30 of Sebi (Listing Obligation and Disclosure Requirement) Regulations, 2015 (Listing Regulations). The company has been regular in making the required disclosures in accordance with Regulation 30 of the Listing Regulations,” it said after the stock exchanges sought a clarification on the news report.
Shares of the airline ended higher by 5.21 per cent, or Rs 12.60, at Rs 254.65 on the news. This came despite Jet Airways reporting losses for the second quarter ended September 30 on Monday. Speaking at a conference call with analysts on the second quarter numbers, the senior management of Jet Airways that included CEO Vinay Dube said the company has engaged the services of experts to work on a turnaround plan and enhance liquidity. This apart it is also looking at a stake sale in JetPrivilege and fresh equity infusion for which investment bankers have been appointed.
Dube pointed out that while aviation is not an easy business globally, in India the opportunities and challenges are at a different level. “In India, the opportunities are staggering, but challenges are equally staggering as airlines battle for market share… Industry fares and yields are down, this is not good for the industry and the consumer in the medium term.’’