Exclusive! Tata, Jet Airways merger: Deal announcement may be tomorrow
Cash-strapped Jet Airways merger with Tata group has been hogging the headlines for weeks now and this is the latest that has emerged. A business viability plan on the proposed acquisition is expected to be presented to the board on Friday itself by Tata Sons Ltd Chairman N. Chandrasekaran, said a newspaper report citing people close to the development.
In a surprisingly swift turn of events, it has been revealed that Tata, Jet Airways merger may well be announced as early as tomorrow, thereby bringing much-needed relief to crisis hit Naresh Goyal led airline! The talks between Jet Airways and Tata group for a merger deal seem to have reached the final stage according to an exclusive news received by Zee Business channel.
Cash-strapped Jet Airways merger with Tata group has been hogging the headlines for weeks now and this is the latest that has emerged. A business viability plan on the proposed acquisition is expected to be presented to the board on Friday itself by Tata Sons Ltd Chairman N. Chandrasekaran, said a newspaper report citing people close to the development. This would be beginning of transaction between the Tata group and Naresh Goyal-promoted Jet Airways.
This show that talks are gathering steam to seal a deal that could transform India`s largest conglomerate from airline fringe player into the country`s dominant, full-service international carrier. According to an Economic Times report today, Tata SIA Airlines, Vistara`s parent, is eyeing an all-stock merger with Jet Airways, founded by Naresh Goyal who has a 51 percent stake. Etihad Airways has a 24 percent stake in Jet. Tata is also partnering AirAsia in India.
— Zee Business (@ZeeBusiness) November 15, 2018
Tata`s businesses are as varied as salt production, IT services, car-making and even defence. In aviation, it runs the Vistara full-service carrier together with Singapore Airlines Ltd. Earlier this year, Vistara has requested authorities for permission to be granted for it to begin international operations.
The Goyal family, Etihad, Tata Sons and Singapore Airlines will all become partners in the new company, said the ET report, adding that the second step of the deal could involve Singapore Airlines buying the Goyal family`s stake in the combined entity, giving the family a complete exit.
The report also said that the talks between representatives of Tata, Singapore Airlines and the Jet Airways management were spurred after US private equity giant TPG Capital took its foot off the pedal in its talks to buy a stake in the cash strapped Jet Airways.
According to the ET report, if the transaction is successful, it will give the Tata group’s aviation plans a much-needed boost as it will secure landing rights, routes and related infrastructure amenities of Jet after the deal. Tata, along with its partner Singapore Airlines, will reportedly infuse capital to enable the Jet-Vistara combine to function effectively.
The Tata-Jet discussions are being led by group chairman N Chandrasekaran and his mergers and acquisitions team with significant inputs and suggestions from chairman emeritus Ratan Tata, said the report, adding that the profits of Tata’s airlines business have been deeply impacted by its inability to have flights across the country.
Jet Airways has repeatedly refused to comment on investor talks, calling them speculative.
Singapore Airlines too has avoided making any comment on "speculation".
Meanwhile, shares of Jet Airways today surged 8 per cent in afternoon trade, amid reports that Tata Group was in talks to buy a controlling stake in the cash-strapped airline company. After a positive opening on the BSE, shares of the company gained 7.9 per cent to touch the day's high of Rs 278.3 apiece.
On the National Stock Exchange also, the airline firm followed similar uptrend as the scrip rose to an intra-day high of Rs 278.7, 8 per cent higher as compared with the previous day close.