India’s largest business Tata group on November 20, talks preliminary about to buy “significant stake” in Jet Airways, which is suffering from financial crunch and even delayed in their salary procedure to their pilots. A warning has been flagged about “reputational issues” of Naresh Goyal-led Jet Airways with its funding sources and business standards.
Jet Airway’s high debt and their issues related to regulatory put up by government agencies and several ministers has led the Tata group to think of buying stake of Jet Airways. The airline is suffering from the debt of Rs 8,400 crore (recorded at the end of September-end), adding aircraft-debt of Rs 1,800 crore.
This condition of airline has made an adverse impact on it, which has led the plan to seal the Tata-jet deal.
At the board meeting held on November 16, Tata son had said, “Any such discussions have been preliminary and no proposal has been made.” However, Tata group conducted an internal panel to carry out the discussion regarding funding of Jet Airways and its financial aspects.
According to news report, according to the findings of the committee, the Tata will take their decision to acquire Airways. Some conditions regarding the transaction with Airways may take place. Tata may insist to take Goyal’s 51% stake of his airlines and handover the board position, which Goyal and his family held, to Tata. Both Naresh and Anita Goyal together owns 51% and Etihad hold 24% stake in Jet Airways.
According to the media reports “the Tatas are likely to insist on heavy non-complete clause with no travel-related business participation. This will be insisted along with a no-board presence of Goyal or his family members. Goyal may not agree to some of the clauses”.