Govt said to have asked Tata Sons to explore Jet bid

MUMBAI: The government has sought Tata Sons Ltd’s help to rescue struggling Jet Airways India Ltd, people familiar with the matter said.

Tata Sons is in talks with the government about a potential haircut to state-run banks on Jet’s loans while Airports Authority of India may forego some of its dues, one of the people said, asking not to be identified as the discussions are private. The Tata Sons’ board is due to deliberate on the matter on Friday, the people said.

A Tata spokesman declined to comment while an aviation ministry spokesman did not answer multiple calls and a text message sent to his mobile phone.

Any investment by Tata Sons will catapult the group to the top league of Indian aviation, dominated by budget carrier Indigo, while providing a lifeline to Jet Airways, which is falling behind on payments to lessors and employees.

A deal that prevents the airline from going bust will save Prime Minister Narendra Modi’s administration, which last month had to oust the board of Infrastructure Leasing & Financial Services Ltd, the embarrassment of staring at a business meltdown ahead of a general elections due by May.

Mint first reported on Tuesday that Tata Group is inspecting the books and assets of Jet Airways as part of a potential purchase of a controlling stake in the airline. Saurabh Agarwal, chief financial officer of Tata Sons, and Jet Airways’ founder and chairman Naresh Goyal are leading the discussions, the

report said.

A deal with Jet Airways, in which Abu Dhabi’s Etihad Airways PJSC owns a 24% stake, will give Tata Group access to some lucrative assets in the aviation business—landing and parking slots in airports from Bangkok to Amsterdam, a large fleet of aircraft, and an established domestic network.

The potential structure of the deal has not been finalized, the people said. One of the options is to merge Jet Airways with Vistara, an airline venture Tata runs with Singapore Airlines, one person said. However, difference in fleet and brand identity could mean two brands continuing separately, at least initially, the person said. Tata Sons also runs a local low-cost airline with Malaysia’s Airasia Group Bhd. The two existing Tata-operated airlines have a combined market share 8.2% in September, compared with Jet’s 15.8%.

On Thursday, shares of Jet Airways surged 24.5% on BSE, the most since it listed on stock exchanges in March 2005.