To represent the Jet Airways, founder Naresh Goyal has withdrawn from the bidding process after Etihad Airways and TPG Capital threatens to walk out of the deal if Goyal was part of it.
As there is no financial assistance forthcoming from the airline’s lenders, Jet’s management has projected a absolute postponement of operations to its board in an ongoing meeting. Currently, Jet is operating seven planes and paying fuel companies on a daily basis.
Etihad’s two key conditions to invest in Jet were Goyal’s complete exit and the exemption from a capital markets rule that mandates companies to put an open offer of 20% shares if it has acquired 25% in a company. Etihad owns 24% of Jet and has specified it wants to keep its shareholding at that level since there will be no exemption from that open offer rule.
The airline which had last month said it won’t participate in a revival plan for Jet returned to talks after Goyal in a letter said he would relinquish all interest and control in the airline. He also resigned as chairman and board member, pledged 31.2% shares in Jet and agreed to pledge more. An EoI from him hence may have come as an unpleasant surprise for Etihad.
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