Wednesday, April 11, 2018

No doubt Air India is a valuable asset, but it's just not for us: Amit Agarwal, deputy CEO, Jet Airways

The Air India sale is important for the Modi government not only to signal its intent but also for keeping the fiscal books in balance.

It seems the government will have to relook at the terms and conditions of the bidding process to widen the participation as possible bidders are not biting the bait as yet. Earlier, Indigo Airlines withdrew from the bidding process and late Monday, Jet AirwaysNSE 1.26 % too backed off.

In an interaction with ETCFO's Mannu Arora, Jet Airways' Deputy CEO and CFO, Amit Agarwal says the terms of the offer document put out by the government did not align with the the company’s strategy, forcing it to pull out from the Air India's bidding process.

Edited excerpts:

What made you pull out from bidding for Air India?
Amit Agarwal: It was not as if we had put expression of interest in the first place. After we had reviewed the information memorandum carefully, we felt that it may not be appropriate at this juncture for Jet Airways to participate into the process.

Which aspects in the information memorandum made you feel it was not "appropriate" for Jet Airways to participate this point of time?

Amit Agarwal: The terms of the offer made us to reach this decision. One thing is clearly the debt level (that the potential buyer for Air India will get). Also there are other aspects which we would not like to get into the detail because this is the internal analysis by the company on the offer. And each company will have its own perspective about the whole terms of the offer.

Did you find the bidding conditions too onerous?
Amit Agarwal: I would not say onerous. It's important that both the contours of the divestment process and the terms of the offer gel with our strategy. If it does not gel with our strategy, the whole debt structure and other aspects, (then) it is not appropriate for us to proceed any further on this.

It worried you … that the potential buyer will acquire some Rs 33,000 crore debt?
Amit Agarwal: It was not a question of worry. It is the question based on the evaluation that we did and felt that this level of debt on the asset may not be appropriate for us. It may be appropriate for someone else.

There is a condition in the memorandum that the buyer has to get the new Air India listed in three years. Was that a factor in your decision?
Amit Agarwal: Some of these aspects which we have reviewed may have a completely different interpretation for us vis-a-vis what it could be for some other bidders. Hence, it is inappropriate to say why Jet Airways is bidding or it is not.
10/04/18 Economic Times