Hinduja group keen on Jet Airways takeover; seeks Naresh Goyal's consent

Company News

The Hinduja group would be keen to take over Jet Airways, provided lenders agree to take a substantial haircut on their dues and founder Naresh Goyal gives his consent to the takeover. A top official of the group said it sees value in the airline, which is going through a crisis.

“We may look at the airline provided banks agree to take a haircut on debt. The high debt is unsustainable,” said a source close to the development. Jet Airways owes Rs 9,000 crore to banks and has defaulted to banks, suppliers and employees. Its operations have shut down due to lack of funds.
If both banks and Goyal agree, the group will start talks with Etihad, which had made a bid for the airline last week. Goyal owned 51 per cent stake in the airline of which 41 per cent stake is pledged with the lenders. “Goyal has run the airline like his own baby and we do not want to take any action unless he agrees,” the source said.

“Traffic from India is growing substantially and we think, in association with Etihad, we can turn around the airline,” the official said, adding that the group was contacted three days ago for a joint venture.

The airline industry in India has already witnessed similar meltdowns with SpiceJet making a spectacular turnaround after a similar situation. “The airline would need a professional management like other Hinduja group companies where the family members do not interfere in the day-to-day operations of any company,” said the source. Traffic from India is growing and there is a need for an another airline to meet the demand, he added.


The Hinduja group runs successful companies in India, including in commercial vehicle major Ashok Leyland, lubricants player Gulf Oil and has stake in IndusInd Bank. Jet Airways stock was down 4.18 per cent on Wednesday to close at Rs 123.7 a share.

Jet Airways fate hangs in balance over funding delays, depleting sales

Companies News

Jet Airways' fate hangs in balance with fast depleting sales and non-committal stance by Etihad Airways on fresh infusion of funds.

On Monday, the airline's founder chairman Naresh Goyal wrote to staff seeking more time to finalise a resolution plan given its complexities. Goyal's email said he is still in talks with lenders and Etihad, but aviation sources indicated that he is looking for a new investor to keep the company afloat.

On Tuesday morning, civil aviation minister Suresh Prabhu directed the department secretary to hold an emergency meeting on grounding of Jet's flights and asked for a status report.

The delay in fund infusion is leading to massive cancellations and employees are increasingly losing confidence in management commitments. Travel agents too are becoming apprehensive about the future of the airline and a few corporate houses have asked their employees to follow discretion while booking Jet tickets.Jet insiders say its truncated schedule of 200 flights each day is not sustainable to meet expenses.

Amit Kelkar, vice president of Jet Aircraft Maintenance Engineers Welfare Association, wrote to the civil aviation ministry on Tuesday, stating that with repeated payment defaults, members had lost confidence in the management. The letter also warned of safety risks, as engineers were not getting paid.

The National Aviators Guild which represents pilots is meeting this afternoon to decide its future course of action. Earlier this month, the union had written to labour minister Santosh Gangwar about pay delays.


 A section of employees however is still hopeful of a positive outcome over the course of the next few days...Read More

Naresh Goyal seeks Rs 750 crore from Etihad to keep Jet Airways flying

International News

Jet Airways Founder-Chairman Naresh Goyal, in a communication to Etihad group Chief Executive Officer Tony Douglas, has said the airline is in a “precarious” position, with more than 50 planes grounded. Goyal has sought Rs 750 crore immediately from Etihad, while raising concerns over “increasing arrears of vendors and salaries’’ at Jet.

This coincides with Jet Airways informing the exchanges that it has defaulted on part payment of a foreign loan due to liquidity constraints. The part payment was due on external commercial borrowing on March 11.

The amount of the default could not be ascertained, but reports suggest that there was a $150-million loan repayment due by March end.

It is learnt that under the proposed bank-led resolution plan to rescue Jet, lenders will infuse Rs 750 crore and Etihad will have to procure funding for the company either itself or through an offshore or on shore lender for a matching amount as the lenders. This is subject to board approval, regulatory clearances, and a valid creation of a pledge over not less than 34.9 per cent of the total issued equity capital of Jet Privilege Pvt Ltd (JPPL) in favour of lenders. The MoU hinges on the completion of an interim financing plan of Rs 4,000 crore, which is crucial for the airline’s survival, a source in the know said.

Even as Jet needs immediate funding to keep flying, the Etihad board met on Monday to take up the bank-led resolution plan for discussion.


 “As a minority shareholder, Etihad continues to work constructively with the Jet Airways board, management team and other stakeholders,’’ the company said in a statement after the meeting. A nod at the Etihad board meeting is critical for Jet’s rescue...Read More

Jet will re-emerge as a robust airline: Goyal, Etihad CEO in joint message

Companies News:

Jet Airways and Etihad Airways are working together on a resolution plan to make the airline robust and viable, the two airlines said in a joint statement .
The communication comes in the backdrop of lessor actions to ground planes and threats from a section of pilots to stop flying over salary delays.

“Jet Airways, its principal shareholders, including Etihad Airways, and key financial stakeholders are working towards the finalisation and subsequent implementation of the bank-led provisional resolution plan (BLPRP) to ensure the carrier emerges as a financially strong and resilient airline. The approval of the BLPRP by the board of directors of Jet Airways last week was an important step in this direction,” Jet Airways Chairman Naresh Goyal and Etihad’s Chief Executive Officer Tony Douglas said in a joint statement.

“We are confident that once the BLPRP is finalised and implemented, Jet Airways will re-emerge as a viable and robust airline to reclaim its rightful place as the airline of first choice for its customers,” it said.

The statement comes four days after the extraordinary general meeting to approve the increase in authorised share capital and conversion of debt into equity. While Goyal skipped the meeting, Etihad abstained from voting on the resolution. Etihad, which owns 24 per cent in the airline, is also laying stiff conditions to infuse fresh capital. The Abu Dhabi-based airline had earlier demanded stripping Goyal of all his powers and also wants a right of first refusal and waiver from the open offer.


 Jet Airways faces a cash crunch leading to defaults in lease and loan payments. On Saturday, the airline informed the stock exchange that lessors had forced the grounding of two additional aircraft. The airline is also negotiating the early return of some of its leased planes because of fund shortage. Meanwhile pilots are also getting impatient over salary delay...Read More

Naresh Goyal sets terms for Rs 700-cr infusion into debt-laden Jet Airways

Companies News:

A day after Jet Airways’ foreign partner Etihad Airways told lenders that promoter Naresh Goyal must not keep more than a 22 per cent stake and that he should have no role in running the airline, the man at the centre of the controversy has hit back.

Jet founder Goyal, in a letter dated January 16, has told State Bank of India (SBI) chairman Rajnish Kumar that he was willing to infuse Rs 700 crore and also pledge all his shares in the company provided he can have at least 25 per cent stake in the airline. Goyal currently controls 51 per cent while Etihad holds 24 per cent in Jet.

ALSO READ: Lenders of debt-laden Jet Airways likely to write off up to 25% of loans


In what looks like a no-holds barred corporate battle for control and ownership between the once close partners, Goyal has pointed out in case his stake falls below 25 per cent, he would not be able to infuse fresh funds or pledge shares until the markets watchdog grants him an exemption related to the takeover cide...Read More