Tata Sons Says Talks To Buy Jet Airways Preliminary, No Proposal Yet
Tata Sons has said that talks to buy a stake in cash-strapped airline Jet Airways (India) Ltd. are in early stages and there hasn’t been any decision taken yet.
"Over the last few days there has been growing speculation in the print and electronic media about Tata’s interest in Jet Airways," the firm said in an emailed media statement. "We would like to clarify that any such discussions have been preliminary and no proposal has been made."
Bloomberg had earlier reported, citing unnamed officials, that the Tata Group is conducting due diligence on Jet Airways’ accounts as it looked to expand its footprint in Indian aviation. It further reported that it was the Narendra Modi administration which approached the salt-to-software conglomerate to help rescue the airline.
A deal would lead to Tata’s third investment in Indian aviation after two joint ventures with Singapore Airlines Ltd. and AirAsia Bhd. For Jet Airways, a stake sale would bring in ease a cash crunch that has delayed worker salaries and payments to aircraft leasing firms.
Jet Airways reported a loss for the third straight quarter as higher crude oil prices, a weaker rupee and competitive tariffs continued to hurt the carrier. The airline has lost nearly 70 percent of its market value this year as its shares fell amid a cash crunch triggered by costlier fuel and its inability to pass on higher costs due to competitive fares in the world's fastest growing aviation market.
Shares of Jet Airways closed 8 percent higher, ahead of Tata's statement, compared with the benchmark S&P BSE Sensex that rose 0.6 percent.