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Tatas confirm interest in Jet Airways, but say talks preliminary and no formal proposal yet

Tata Group on Friday confirmed its interest in Jet Airways, but said the ongoing discussions on buying stake in debt-laden airline is preliminary and no proposal has been made.
"Over the last few days there has been growing speculation in the print and electronic media about Tata’s interest in Jet Airways. We would like to clarify that any such discussions have been preliminary and no proposal has been made," the company said in a statement.
The board of Tata Sons met on Friday to discuss a proposal to take over the Naresh Goyal-controlled Jet Airways.
Tata Sons chairman N Chandrasekaran is pitching for the acquisition of cash-strapped Jet Airways, even as Chairman Emeritus Ratan Tata has reservations about the proposed deal, multiple sources told CNBC-TV18.
CNBC-TV18 reported earlier this month that Jet Airways promoter Naresh Goyal has been reportedly approaching top corporate houses, including the Tata, for a possible equity infusion.
Airline’s deputy chief executive and chief financial officer Amit Agarwal earlier this week had admitted that the company was in talks with “multiple interested parties” for fund infusion as well as selling six of its Boeing 777 planes and a stake in its loyalty progarmme Jet Privilege.
Tata Sons already runs two airlines – the full-service carrier Vistara in a JV with Singapore Airlines, and the low-cost carrier AirAsia India in JV with Air Asia of Malaysia.
The salt-to-software Tata Group is keen on buying out the promoters, Naresh Goyal and family, and the foreign equity partner, Etihad’s stake in Jet Airways. Currently, Jet Airways promoters hold 51 percent stake in the carrier and Etihad holds 24 percent.
The Tatas have long been interested in aviation. Despite issues around crude and ATF (air turbine fuel) prices, the long-term growth story of aviation seems to be positive.
Jet Airways earlier this week reported Rs 1,261 crore loss for the September quarter against a profit of Rs 71 crore y-o-y, making it the third straight quarters of heavy losses.
This had the airline also putting as many as six of its Boeing 777s on sale to part-fund liquidity.
In an exchange filing, Jet Airways described the media reports as speculative.
“…the subject news is speculative in nature and that there is no discussion or decision in the board which would require a disclosure…,” the airline informed BSE.
“We are currently at various stages of discussions with multiple interested parties for both part stake sale in Jet Privilege and fresh equity infusion,” Agarwal had told analysts during the post-earnings concall Tuesday.
He had also said the company hired investment bankers and consulting firms to carry out these tasks.
The cash paucity in the country’s second largest airline by market share has resulted in delayed payments to some vendors and salaries to a section of its over 16,000 employees.
With inputs from agencies.

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