KOCHI: Jet Airways promoter Naresh Goyal is learned to have approached Abu Dhabi-based NRI billionaire MA Yusuffali for investing in his struggling-to-survive airline. Goyal is also in talks with Abu Dhabi’s Etihad to get the latter to raise its stake in Jet from 24% to anywhere up to 49%.
Jet’s founder needs a partner to meet the norms that a domestic carrier’s substantial ownership and effective control (SOEC) must remain with Indian entities. Yussuffali, the richest Indian billionaire in the Arab world, also known for his proximity to the Abu Dhabi royals, may board Jet Airways only in tandem with Etihad.
“This would be a deal between Etihad and Yusuffali to take charge of the Indian carrier. It must be seen in the context of Etihad’s deal with Goyal,” said a person familiar with the matter.
Etihad has had frosty ties with Goyal after investing $380 million in Jet Airways five years ago.
Etihad doesn’t want the airline to be grounded especially after India’s largest conglomerate Tata, which had evinced interest in a takeover, slowed down negotiations.
On its part, Jet said it “does not comment on speculation”. Yusuffali said: “I have no interest in buying an airline. My focus will be on my core areas of retailing and hospitality, where I will continue to invest.”
However, a person privy to this development said: “Goyal had called up Yusuffali 10 days ago and discussed his buying a strategic share in the airline. They had a detailed conversation. But Yusuffali is apprehensive about investing in an industry that loses so much money.”
The reason why Goyal approached Yusuffali is that the latter is not new to aviation and both the businessmen have very strong ties in and with the Gulf. Jet has, for years, been serving the Kerala-Gulf market and the relations between the two businessmen are learned to be very good.
Yusuffali was on the board of Air India from 2010 to 2013. He is also an investor in two airports in Kerala — Cochin International Airport Ltd and the newly-built Kannur International Airport Ltd (KIAL).
If Yusuffali and Etihad agree, Jet Airways could get the funds needed to survive, with Goyal still remaining an important figure in the airline. “It is not going to be a simple transaction as a rights issue may be needed for Goyal and an Indian partner to hike their stake to meet SOEC norms while Etihad also ups its ownership in Jet,” said an aviation insider.
According to Jet’s latest shareholding pattern on BSE website, the airline’s two promoters — Naresh and wife Anita Goyal — held 51% stake in the airline in September 2018. Of the 49% ownership with public, Etihad has 24%. “For Jet to get life-saving funds with Yusuffali or some other Indian partner, and Etihad or any other foreign airline picking up or hiking stakes in the airline, a rights issue may be essential,” said the aviation insider.
Goyal’s talks with Tata Group are learnt to have hit a roadblock as the Tatas were reportedly keen that the Jet promoter exits the airline.
The airline is bleeding heavily and requires infusion of funds quickly to stay alive. Jet has had three quarterly losses of Rs 1,000 each since January-March 2018 period. In H1, 2018-19, Jet has reported losses of Rs 2,620 crore which means it has lost over Rs 14 crore per day in the first six months of current fiscal.