Tata Sons, the holding company of the Tata group of companies, is in advanced talks to acquire a significant stake in the troubled airline, Jet Airways
The airline, promoted by entrepreneur Naresh Goyal, has been scouting for investors to tide over its financial difficulties.
According to news reports , The Tata group and Naresh Goyal-promoted Jet Airways are inching towards a two-step transaction the first leg of which could see the merger of Jet with Tata Singapore Airlines. The second step of the deal could involve the purchase of the Goyal family’s stake in the combined entity by Singapore Airlines
The talks between representatives of Tata group, Singapore Airlines (SIA) and the Jet Airways management gathered pace after US private equity giant TPG Capital opted to go slow on its talks to buy a stake in Jet. As per the terms under discussion, Jet Airways will first merge with Tata SIA through a share swap.
The Naresh Goyal family, Etihad, Tata Sons and Singapore Airlines will all become partners in the new company. In the second stage, Singapore Airlines will buy out the shares of the Goyal family, giving them a complete exit. Goyal’s partner Etihad may continue with the venture as minority shareholder.
Buying Jet, with its fleet of 124 aircraft, would return Tata to the forefront of Indian aviation in terms of size, almost 70 years after its first airline was nationalised, and six years after it re-entered the market with two joint ventures, Vistara & Air Asia.
Should a deal with Jet succeed, Tata would gain access to hard-to-get parking slots at Mumbai’s congested airport, most of which are occupied by the 25-year-old airline.