Naresh Goyal sets terms for investing Rs700 cr in Jet Airways
18 Jan 2019
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Jet Airways chairman Naresh Goyal has offered to invest up to Rs700 crore in the beleaguered airline and also pledge all of his shares provided his stake does not fall below 25 per cent.
Goyal stated this in a letter written to SBI chairman Rajnish Kumar over the resolution plan being discussed with lenders and partner Etihad. The offer comes against the backdrop of strategic partner Etihad reportedly putting forward strict conditions, including that Goyal should give up control, for infusing funds into the airline.
Goyal, who currently holds 51 per cent stake in the airline, said his offer must be seen as significant as it comes "despite the significant cash crunch and imminent grounding, which the airline is facing".
"Should this not be possible, then I would not be able to infuse any funds or pledge my shares, unless Sebi accords me an exemption permitting me to increase my reduced stake (if it is to be below 25 per cent) without triggering the Takeover Code," Goyal said.
Under the $900 million resolution plan proposed by lenders, Ethihad will acquire an additional 25 per cent in the carrier to take its stake to 49 per cent and invest $450 million. Lender banks, led by State Bank of India (SBI) will also invest an equal amount with SBI taking a 20 per cent share in the airline.
With Ethihad taking 25 per cent and SBI another 20 per cent equity stake, Goel will have to dilute his 51 per cent stake well below the takeover trigger.
When shareholding of an entity in a listed company goes beyond a certain threshold, then the open offer requirement is triggered under Sebi's Takeover Code.
"I am informed that under Indian law, amounts payable by the company to promoter group entities, should be treated at par with the other overdue creditors of the company and the same, upon conversion into equity is considered as cash," Goyal said in the letter.
He has also sought a fair and equitable resolution in the best interests of the airline and all its shareholders.
"I respectfully submit that unless my shareholding goes below 10 per cent and/ or my group is not represented on the board, I would continue to be held out as a promoter, and be faced with the attendant exposures/ risks of being a promoter," Goyal said in the letter dated January 16.
Hence, it is only fair and equitable that "our shareholding be at least 25 per cent", Goyal said.
On Thursday, the SBI said lenders are considering a resolution plan for Jet Airways to ensure long-term viability of the debt-laden company.
On 31 December 2018, the carrier defaulted on a loan repayment to the consortium.
The airline, on Wednesday, said discussions are "progressing well" with stakeholders on a comprehensive resolution plan that also contemplates equity infusion and consequent changes in its board of directors.
The airline has also deferred deliveries of Boeing 737 MAX planes. Jet Airways was to induct 11 Boeing 737 MAX planes by March this year, but has taken delivery of only five such aircraft so far.
The airline also said it has been working on various cost cutting measures, debt reduction and funding options.
