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Regular-article-logo Wednesday, 17 July 2024

Tata Sons to take a call on Jet Airways deal

Board to meet on Friday to discuss plan to buy debt-burdened airline

Our Special Correspondent Mumbai Published 15.11.18, 07:44 PM
Jet Airways promoter Naresh Goyal along with his family own a 51 per cent stake in the carrier and Etihad Airways holds a 24 per cent stake.

Jet Airways promoter Naresh Goyal along with his family own a 51 per cent stake in the carrier and Etihad Airways holds a 24 per cent stake. (Shutterstock)

The board of Tata Sons will meet on Friday to deliberate on a proposal to acquire Jet Airways.

The ailing airline has been considering various options, including infusion of fresh equity, to wriggle out of a liquidity crunch.

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If the 10-member board approves the plan, the Tatas are likely to take big strides in acquiring the airline that has a fleet of 124 aircraft.

Tata Sons already runs two airlines — full-service carrier Vistara in a joint venture with Singapore Airlines and low-cost carrier AirAsia India in a joint venture with Air Asia of Malaysia.

While a Tata Sons spokesperson refused to comment on speculation, it is learnt that the group is keen to acquire the entire airline, including its various assets and stake in the loyalty programme.

Jet Airways promoter Naresh Goyal along with his family own a 51 per cent stake in the carrier and Etihad Airways holds a 24 per cent stake.

The buzz is that the Tatas may acquire a substantial part of the promoter holding as well as the stake held by Etihad. Though Goyal was earlier not keen to give up management control, reports now indicate that he may retain only a small stake in the airline which posted a standalone net loss of Rs 1,297.46 crore for the second quarter ended September 30.

N. Chandrasekaran, executive chairman of Tata Sons, is keen on the proposed transaction and will reportedly make a business viability plan to the board. If the transaction goes through, it will catapult the Tatas to the top league in the domestic aviation sector.

Analysts said though the deal will benefit the Tatas because of a wider network access, Jet Airways’ debt at Rs 8,400 crore as of September could be a challenge.

Shares of Jet Airways soared almost 25 per cent, or Rs 63.20, to Rs 320.95 on the BSE.

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