India Markets closed

Jet Airways revival: Hinduja Group puts conditions, seeks assurance from govt before finalising investment in grounded airline

FP Staff
Jet Airways shares tumbled to a fresh 52-week low of 84.80 on BSE. Its market capitalisation fell to Rs 986.03 crore with 15.61 lakh shares changing hands on BSE

The Hinduja Group, which is evaluating an opportunity to invest in the now-grounded Jet Airways, has put certain conditions and sought assurances from the government before finalising investment in the crisis-hit airline, said a media report.

The Hinduja group reportedly sought an assurance from the Centre that the investigation connected to the crisis-hit airline should be put on fast-track, reported Business Standard.  The reason behind seeking assurance from the government is to ensure that the airline's business potential is not affected adversely in any manner after the business conglomerate invests in it.

Besides this, Hindujas wanted to ensure that they would not be dragged into any cases linked to financial irregularities that allegedly took place during the tenure of the airline's founder Naresh Goyal, a report said.

Early last month, the Mumbai regional office of the Ministry of Corporate Affairs (MCA) submitted its report recommending a detailed investigation into the affairs of Jet Airways after reaching a conclusion that the transactions of the Goyal-led airline were 'suspicious' in nature and required a thorough probe, according to The Economic Times.

In February this year, the Mumbai unit of the Registrar of Companies (RoC) had launched an inspection of the books of Jet Airways, almost eight months after the MCA directed it to investigate the allegations that the airline siphoned off money, said the report.

By the end of last month, the government asked the lenders of Jet Airways to share findings of a forensic audit report of the airline in March, around the same time Goyal quit all executive roles, said a report in Mint quoting two people directly aware of the matter.

Last month, there were reports that the Hinduja Group was planning to initiate the bidding process for Jet Airways reviving hopes of fresh life to the debt-laden airline. In this regard, the business group and Etihad Airways were expected to meet to explore ways to revive the cash-starved airline.

The Hinduja Group reportedly had received the approval of the major stakeholders of Jet Airways including its founder Naresh Goyal and Etihad Airways to go ahead with the bidding process. But hopes of Jet Airways revival faded as Hinduja Group and Etihad Airways reportedly failed to clinch a deal for joint ownership of the now-grounded airline.

The Hinduja Group was considering investing around Rs 1,000-1,500 crore as part of a plan to revive the airline. The Hinduja Group, along with Etihad Airways, State Bank of India (SBI) and London-based AdiGro, was exploring the possibility to create a consortium to own Jet Airways.

On 28 May, it was reported that the lenders of Jet Airways, led by SBI, might take a final decision on the fate of the crisis-hit airline in two weeks.

The lenders, however, did not receive a formal offer from the Hinduja Group. The lenders even agreed to take a significant haircut and any new investor is expected to seek anywhere between 80 percent to 90 percent haircut from the banks.

On 25 May, Goyal and his wife Anita were denied permission to travel abroad by the immigration authority at Mumbai airport. The couple was to travel by Dubai-bound Emirates flight EK 507 when the immigration authority denied them permission to fly, officials said.

Also See: Jet Airways crisis: SBI Chairman Rajnish Kumar to meet aviation secretary today to review status of resolution plan

Jet Airways crisis: Lenders likely to take final decision on the fate of grounded airline in next two weeks

Jet Airways crisis: Hinduja Group, Etihad Airways fail to strike deal for joint ownership of grounded airline

Read more on Business by Firstpost.