Cash-strapped Jet Airlines has been considering to infuse funds with multiple parties and selling six of its Boeing 777 planes, following losses for the third straight quarter
New Delhi: The Tata Sons Board is likely to evaluate a proposal to take over the Naresh Goyal-controlled Jet Airways.
According to a report in PTI, Tata Sons Ltd Chairman N. Chandrasekaran is expected to present a business viability plan. Onlookers and experts feel that the matter is clear that Tata Sons is keen on sealing the deal that could mean the mammoth entering into the country’s aviation sector as a dominant, full-service international carrier.
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".
Earlier this week, Jet Airline’s deputy chief executive and chief financial officer Amit Agarwal had said the cash-strapped airlines was mulling over fund infusion with "multiple parties" and also selling six of its Boeing 777 planes and a stake in its loyalty programme Jet Privilege.
Goyal and his family own 51% stake in the carrier, while UAE-based Etihad Airlines owns 26% stake in the company.
Sources said Tata and Jet are inching toward a two-step takeover plan that would first see Jet merge with Tata SIA through a share swap. The Goyal family, Etihad, Tata Sons and Singapore Airlines will all become partners in the new company, it added.
In the second step, Singapore Airlines is expected to buy Goyal family’s stake in the combined entity, giving the family a complete exit.
Jet Airways recently posted losses for the third straight quarter with a net standalone loss of Rs 1,297 crore in the July-September quarter on higher fuel costs and foreign currency losses.
Jet Airways’ losses for the first six months of 2018-19 now stand at Rs 2,620 crore.
The carrier has lost nearly 70% of its market value this year as its shares fell amid a cash crunch triggered by costlier fuel and its inability to pass on higher costs due to competitive fares in the world's fastest-growing aviation market.
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.
(WIth agency inputs)
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