Monday, January 21, 2019

A Jet-Etihad deal won’t comfort many investors

Mumbai: Life seems to have come full circle for Jet Airways and Etihad Airways. And not in a nice way.
The two are once again stuck in a complex web of altercations that coloured their initial talks before the Abu Dhabi-based airline bought 24% stake of its Indian peer. Only this time, it seems the discussions are more bitter, the efforts at cornering out the other party are more pronounced, and the brinkmanship is more prominent than ever before.
Jet, facing the worst financial crisis of its existence and having failed to garner definitive interest from any other investor, not for want of trying, has finally knocked on Etihad’s door for additional funding.
But Jet’s chairman Naresh Goyal wants to still own and manage the airline, according to people in the know.
Etihad wants a Goyal-less Jet, going by its communications to Jet’s lenders.
Goyal last week wrote in a letter to lead lender State Bank of India’s chairman Rajnish Kumar that he was willing to invest Rs 700 crore in the airline, but his stake shouldn’t fall below 25% from the current levels of 51%.
It wasn’t clear why he had let his airline go so far into its current crisis before making this offer.
SBI, along with other local lenders, is trying to formulate a resolution plan for the airline. Jet defaulted on loan repayments in December.
21/01/19 Anirban Chowdhury/Economic Times