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Tata Sons on Friday clarified that any discussions with Jet Airways have been “preliminiary” and “no proposal” has been made.
A spokesperson for Tata Sons confirmed that the board led by Chairman N Chandrasekaran had met but declined to get into the specifics of what transpired at the meeting.
It had been rumoured that Tata Sons’ Chairman was to make a presentation to the board today on the preliminary discussions with Jet Airways and leave a decision on whether Tata Sons should invest in the oldest private sector airline to the board.
There has been intense speculation over the past couple of days that Tata Sons was doing due diligence of cash-strapped Jet Airways and looking at picking up a majority stake in the Naresh Goyal founded airline.
Jet stock surges
The news of Tata Sons’ interest in Jet Airways saw the airline’s stock close at ₹346.85, an increase of over 8 per cent over the previous day’s closing. Reuters reported that Jet Airways’ shares hit a five-month high.
However, on November 13, senior Jet Airways officials said in an analyst call that they were in talks with multiple parties for a stake sale in JetPrivilege Private Limited (JPPL) and a fresh equity infusion into the company. They gave no specifics, however.
Tata Son is already invested in Air Asia India, a budget airline and in Vistara, a full-service airline for which it has tied up with Singapore Airlines. While SIA holds a 49 per cent stake in Vistara, the rest is held by Tata Sons.
AirAsia India and Vistara are not listed so the exact financial health of both the airline is not publicly known. It is, however, estimated that neither is in a financially sound position.
There have been rumours that senior officials of Tata Sons are not keen to invest in Jet Airways and would rather use the funds to prop up the airlines in which the Tatas already have a stake.
Analysts believe that Jet Airways requires an equity infusion of about $1 billion or about ₹ 7,000 crore to run on a sustainable basis.
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