Jet Airways shares soar on reports deal with Tata is close
BENGALURU – Shares in India’s Jet Airways jumped 25 percent on Thursday following media reports that the debt-laden airline was nearing a rescue deal with Indian conglomerate Tata Sons.
Tata SIA Airlines, a joint venture between Tata Sons and Singapore Airlines, which operates domestic carrier Vistara, is eyeing an all-stock merger with Jet, the Economic Times reported earlier in the day, citing sources.
As part of the deal, Singapore Airlines would also buy out Jet founder Naresh Goyal’s 51 percent stake, the report said.
A deal with Jet would transform Tata, India’s largest conglomerate, from a fringe player in the airline industry into the country’s dominant, international carrier.
India is the world’s fastest-growing domestic aviation market with annual passenger growth of about 20 percent, but rising fuel costs, a weak rupee and intense competition have wrought havoc on the finances of carriers such as Jet.
Jet said the report was speculative.
“There are no discussions or decisions by the board which would require a disclosure,” it said in a statement to the stock exchange.
Meanwhile, local daily the Times of India, citing people close to the situation, said Tata Sons chairperson Chandrasekaran was expected to present a business viability plan to the board on Friday on a proposed acquisition of Jet.
Tata Sons did not immediately respond to a Reuters request for comment. Naresh Goyal and family were not immediately reachable for comment.
Jet shares, which had fallen 69 percent this year, rose as much as 30 percent before ending almost 25 percent higher at 320.9 rupees on record volumes. That was their best closing level since late August and their best performance in percentage terms since listing in 2005.Reuters