Jet Airways denies stake sale talks with Tata; says news speculative

By: | Published: October 18, 2018 11:53 AM

At present, Naresh Goyal, chairman of Jet Airways, along with his wife Anita, owns the controlling 51% equity stake in the struggling airline, while Abu Dhabi-based carrier Etihad Airlines owns 24% equity stake.

jet airways, jet airways news,salary payments of staff, latest news, important news, trending news, news today, news now, jet airways latestThe deal, if clinched, is expected to help Tata group to scale up its aviation business in a big way. (Reuters)

Debt-ridden Jet Airways spokesperson has refuted media reports saying news on Tata Group holding discussions to acquire a controlling stakeholding in the carrier is totally speculative, the Reuters reported on Thursday. On Wednesday, a news report by the Times of India said that the Naresh Goyal-founded Jet Airways is in talks with Tata group to sell a large stake.

The paper also said the Tata group, which already has two aviation ventures in India through Tata Sons- Vistara with Singapore Airlines and AirAsia India with the Malaysian budget carrier AirAsia Group – is looking to take 26% stake initially and another 26% through an open offer, along with the management control. The deal, if clinched, is expected to help Tata group to scale up its aviation business in a big way.

The full-service carrier, which is going through financial crunch on account of rising fuel prices and depreciating rupee, had said in August this year that it has plans to raise capital and reduce costs, as part of its efforts to turn around the business. The airline, which has delayed salaries to pilots, however, did not disclose further details.

At present, Naresh Goyal, chairman of Jet Airways, along with his wife Anita, owns the controlling 51% equity stake in the struggling airline, while Abu Dhabi-based carrier Etihad Airlines owns 24% equity stake. The paper also reported that Etihad may also divest its all or part of its stake if the talks fructify.

In the April-June quarter of the current financial year 2018-19, the airline reported a net loss of Rs 1,323 crore, on account of higher fuel cost, depreciating rupee and low fares. Total income, however, marginally improved to Rs 6,066 crore, from Rs 5,953 crore a year ago.

On August 28, Jet Airways announced that it has received an additional equity of $300 million from domestic banks in the form of advance lease incentives and borrowings. In May, rating agency ICRA said that the airline has Rs 3,120 crore worth of loan repayments due in the year through March 2019.

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