Contrary to speculation that a restructuring proposal of Jet Airways is hanging because promoter-chairman Naresh Goyal is unwilling to bring down his controlling stake below 51%, sources said that the latter is amenable to a deal where he sells his shares not below Rs 200 a piece and his stake does not go below 25%.
As reported earlier, Jet’s 24% stake partner Etihad Airways is willing to increase its stake to 49% along with an immediate infusion of $35 million but it has said that it will not pick up the shares at more than `150 a piece. Shares of Jet Airways closed 1.21% down, at `273.10 on Tuesday on the Bombay Stock Exchange. Etihad also wants that it be exempt from the mandatory open offer.
Etihad CEO Tony Douglas had put his conditions in his letter to the chairman of State Bank of India which is the lead lender to the cash-strapped airline. Douglas also wants that Goyal’s holding should come to around 22% and he and his family should have no role in the running of the airlines.
In response to Etihad’s proposal, Goyal also wrote to the SBI chairman stating that he was willing to pledge his shares and infuse `700 crore into the airline provided his stake does not fall below 25%. In case it falls below 25%, he should be allowed to raise it up to that level in future without having to go through the attendant open offer.
“If he (Goyal) gets anything less than `200, he will push for some arrangement. In this case, he may push for an arrangement that kicks in a few years later— like for example an arrangement that possibly allows him to increase his stake in the future. I doubt he will do the deal at less than `200. The only option if Etihad goes, is for the banks to convert their shares into equity and think about the management without Goyal, which is very unlikely,” a source said.
Last week Jet Airways had informed the stock exchanges that the consortium of banks is contemplating various options for a turnaround that includes options on the debt-equity mix, proportion of equity infusion by various stakeholders and the consequent change in the composition of the company’s board of directors.
Source: Financial Express