Jet stake sale: Naresh Goyal, Tata's senior representatives meet in London

Jet Airways Chairman Naresh Goyal (pictured) met senior representatives of the Tata group in London last week in an effort to find an investor in his cash-strapped airline.

The Jet Airways team was led by Naresh Goyal and Amit Agarwal, who is deputy chief executive officer and chief financial officer. Tata Sons Chairman N Chandrasekaran and group chief financial officer Saurabh Agrawal attended the meeting for the Tatas. 

The Tata group, which owns two joint venture airlines (AirAsia and Vistara), has evinced interest in acquiring a majority stake in Jet. While preliminary talks had happened earlier, the two sides are said to have met last week.

Jet had earlier called reports of possible stake sale to Tatas as speculative and it did not respond to a specific query on the meeting between Goyal and Tatas.

However, any progress on the deal depends upon Goyal giving up control of the company.

“Tatas will not run three airlines. They will like to merge any new airline they acquire with their existing ones. This was the issue that they raised during talks over the Air India deal,” said a person involved with the Air India sale process.

Tatas had shown initial interest in buying stake in Air India but did not make any offer. Eventually, the Air India disinvestment was put off by the government as it did not receive any bids. “We do not comment on market speculation,” a Tata group spokesperson said.

Goyal and the Jet senior management have been in London for the past few days. Chandrasekaran  and other senior group executives were in London for a board meeting of Jaguar Land Rover. 

Sources say there could have been exploratory talks between the two and Tata group is evaluating how it would turn around the ailing airline, which is struggling to make timely payments.

Senior investment banking executives said that none of the companies have started the process of appointing bankers for the deal.

Earlier reports indicate that Tatas want a majority stake and complete control, which the Jet promoter is resisting. If the Tata-Jet deal fructifies it would consolidate the group's aviation business.

According to industry experts, Jet would be a better proposition for Tatas than Air India. 

At present, Jet is the largest airline on international routes to/from India with a large network and slots at key airports.

But a deal would be difficult given the friction between Tatas and Goyal. Jet is said to have blocked Tata-Singapore Airlines’ bid for Air India in 1990s and is a member of the lobby group that has opposed relaxation in overseas flying norms, much to the annoyance of AirAsia and Vistara.

However, there are some who believe Tatas will not bail out Jet. 

“Vistara will gain significantly if Jet goes down,” said an expert.