The Tata Group wants complete control over Jet Airways along with the exit of existing promoters, the Goyal family, and has rejected an initial proposal for part-ownership and joint control of the airline.
People close to the talks said the Tata Group has made it clear to Jet representatives that it is interested in an outright purchase either of the entire company or its assets such as aircraft and other aviation-related infrastructure.
It will not, however, be interested in a deal where the Goyals, who currently own 51 per cent of Jet, retain significant control. The Times of India had reported on Thursday that the Tata Group and Jet Airways were in initial talks for a stake sale.
Jet representatives offered the Tatas 26 per cent and some board-level positions, including vice-chairmanship. This proposal has been rejected. “The Tatas are interested in buying out the entire airline and significantly scaling up the existing business,” said a top official close to the development.
A Jet Airways spokesperson said the information is totally speculative while the Tata Sons spokeswoman said, “We do not comment on market speculation.”
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“We are looking at a single scalable entity and our plan will be the way we did the steel acquisition… we are not interested in small, incremental alliances and looking at a deal beyond asset sales,” said another person working with the Tata Group.
Tata Sons chairman N Chandrasekaran and Jet Airways chairman Naresh Goyal have met once. The talks could still go on if a proposal more amenable to the Tatas is put on the table.
Texas-based private equity giant TPG Capital had also rejected a similar offer for part-ownership by Jet Airways. Goyal and wife Anita own 51 per cent in the airline while UAE’s Etihad Airways has 24 per cent stake.
The airline had two rounds of negotiations with TPG Capital, but the talks got stuck due to differences over controlling rights and Goyal’s demand for a role post acquisition. A spokesperson for TPG declined to comment.
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Cash-strapped Jet, which has delayed salaries to pilots and key executives, has been in talks with both strategic and financial investors to sell assets and a major chunk of its business to stay afloat. It had informed stock exchanges of its plan to sell the frequent flyer business, JetPrivilege.
The Tata Group, which founded Air India decades ago, has two aviation joint ventures. One is Vistara, a full-service carrier with Singapore Airlines, and the other is a low-cost carrier with Malaysian budget airline AirAsia.
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If talks with Jet succeed, the group will revamp its existing aviation ventures and align everything with Jet, said another person mentioned above.
“Ideally, we should have one airline,” a senior official had said in an earlier interaction with ET.
