Wednesday, November 21, 2018

Tata Sons board urges Chandra to proceed cautiously on Jet deal: Report

New Delhi: Although Tata Sons last week confirmed that the Group is in preliminary talks with Jet Airways over a possible takeover of the beleaguered airline, its board is reportedly in no hurry to seal the deal. The investment holding company of the $103-billion salt-to-software conglomerate is instead advocating a cautious approach.

People in the know told The Economic Times that some Tata Sons board members urged Chairman N. Chandrasekaran and his team to appoint external consultants to aid in the due diligence process and make it as comprehensive as possible amid concerns of a jump in the Naresh Goyal-promoted airline's liabilities. The board needs to ratify any investment of more than Rs 100 crore by group companies under its Articles of Association.

"Many board members have suggested to the management to be cautious and not to rush to do the deal," said a source, explaining that a preliminary report is expected in a few weeks. "The board will discuss the due diligence report and will later take a call." The board met last Friday to discuss investing in Jet Airways, and a possible takeover.

Given the state of affairs at Jet Airways, the person added that two external agencies will be appointed [for the due diligence] apart from the in-house team of the Tatas. The cash-strapped airline reported its third consecutive quarterly losses for the quarter ending September, and is currently scrambling for funds to tide over a liquidity crisis that has resulted in delayed payments to some vendors and salaries to a 15% of its over 16,000 employees.
20/11/18 Business Today