User avatar
BawliBooch
Posts: 1373
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:22 am

blrsea wrote:
Looks like govt is prodding bankers to give more leeway to Jet. Govt could end up with egg on its face...

Jet lenders in dilemma as Ethihad seeks easing of preferential share norms

In the course of interactions with senior government functionaries, bankers have gathered the impression the Centre would prefer lenders to give some latitude to Etihad, Jet’s foreign stakeholder, for it to infuse funds.



Udi Baba! :shock:

But...but...but... we were told that "Dial a Loan" was no longer an option?

Is it private banks who are being pressurised by the Govt or the state banks? If it is the latter, there is more taxpayer flushed down the drain!
Mr.Kapoor's favorite poodle!
 
blrsea
Posts: 1919
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 7:54 am

EY is asking for lots of goodies to bail out Jet. Wonder if the lenders, regulators and even Naresh Goyal will go along with it? Maybe it would have been better to deal with Tatas?

Etihad CEO sets tough new terms for Jet Airways bailout

Driving a hard bargain in exchange for a lifeline for the cash strapped Jet AirwaysNSE -6.37 %, Etihad Airways CEO Tony Douglas has set a slew of tough pre-conditions which include complete exit of Naresh Goyal and his family from the management of the Indian carrier.

Etihad has sought exemptions from Sebi from making a open offer and preferential pricing guidelines stating that the fair price for Jet Airways shares is in the region of Rs 140 to 150, a share, far lower than the current market price.

“Without this approval we are not willing to invest a single penny further,” Douglas stated bluntly in a letter addressed to Rajnish Kumar, chairman of the State Bank of India. ET has reviewed the letter, dated 15th January. A copy of the letter was also marked to Naresh Goyal and aviation secretary R N Choubey.

...
In addition, Etihad is also demanding that Mr Goyal’s future role as “Chairman Emeritus” should be “well defined,” stressing that no board seat should be given for Mr. Goyal himself and no rights for him or his family and affiliates to act or represent the airline.

...
Etihad has also agreed to infuse $35 million from Jet Privilege, where it owns majority shares but after the due diligence is completed.

Douglas has also sought all terms and conditions relating to Naresh Goyal’s association with Jet to be drafted in a legally binding form.


As a consequence, Jet's stocks fell 8%!

Jet stock hits air pocket on Etihad offer, plunges 8%

Shares of Jet Airways plunged nearly 8 per cent on the BSE on Wednesday after reports that Etihad Airways offered to invest in the beleaguered carrier at a discount.

According to media reports, the discount is as much as 49 per cent to its closing price of Rs 293.70 on NSE on Tuesday.

Etihad Airways has offered to invest in debt-laden Indian carrier Jet Airways at Rs 150 per share, along with an immediate release of $35 million after certain conditions are met, CNBC-TV18 reported on Wednesday.
...
 
User avatar
Spiderguy252
Posts: 1132
Joined: Mon Feb 02, 2009 10:58 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 8:10 am

Well, if nothing happens now you really have to keep the hearse on speed dial.

NG should have taken the (better) Tata offer while it was still around.
Vahroone
 
EmoticonsAllDay
Posts: 148
Joined: Fri Nov 16, 2018 2:19 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 8:16 am

Quite the expected. It would have been the same with the TATAs.
 
blrsea
Posts: 1919
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 8:32 am

Actually, looking at Jet's stock prices over the last six months, it hit around Rs 163/share in October and it slowly started rising again on rumors of Tata being interested, and later on EY. However, since the company is in worse position now compared to October wrt cash flows and is also in default, Rs 150 per share might not be unreasonable.
 
avier
Posts: 921
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 9:01 am

So that's EY arm twisting 9W now. If NG's out, they need an Indian partner to fill up that role, where none want to participate knowing the nature of the industry. It's up to EY now to look for that Indian partner. They obviously just can't get NG out and have the airline to themselves, so wonder what's their plan post getting him out.

I just hope TATA's don't participate with EY on this, knowing their nature now and being the worst of the ME3.
 
avier
Posts: 921
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 9:13 am

QR would have been the perfect partner for 9W and it'd have been a win win for both parties. QR would have had an Indian FSC as envisioned, that too in the heart of Mumbai, and 9W would get a cash rich partner. For the fact that QR has stakes in mega airline groups like IAG and China Southern, it'd have been peanuts for them to get a stake and rescue 9W along with fulfilling their dreams for an Indian venture.
But for political reasons they cannot get the stake, like mentioned below.
https://m.businesstoday.in/story/not-interested-in-enemy-state-backed-jet-airways-says-qatar-ceo-akbar-al-baker/1/310437.html
 
binayak
Posts: 979
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 9:36 am

avier wrote:
QR would have been the perfect partner for 9W and it'd have been a win win for both parties. QR would have had an Indian FSC as envisioned, that too in the heart of Mumbai, and 9W would get a cash rich partner. For the fact that QR has stakes in mega airline groups like IAG and China Southern, it'd have been peanuts for them to get a stake and rescue 9W along with fulfilling their dreams for an Indian venture.
But for political reasons they cannot get the stake, like mentioned below.
https://m.businesstoday.in/story/not-interested-in-enemy-state-backed-jet-airways-says-qatar-ceo-akbar-al-baker/1/310437.html


I felt that the first thing jet would've done had it partnered with QR, would've been discontinuing tie ups with AF KL and DL. Something which would've led them to change the length and breadth of their int'l network and could've had negative impacts on jet too.
The best preparation for tomorrow is doing your best today
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 11:24 am

Spiderguy252 wrote:
Well, if nothing happens now you really have to keep the hearse on speed dial.

NG should have taken the (better) Tata offer while it was still around.


That offer was only in the minds of Times Group journalists, it was not real.

24% @ 800 and 25% @ 150, averages to ~468 per share.

It is not who can buy these penny stocks, it is who can bring the WC going forward.
 
blrsea
Posts: 1919
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 12:15 pm

dtw2hyd wrote:
Spiderguy252 wrote:
Well, if nothing happens now you really have to keep the hearse on speed dial.

NG should have taken the (better) Tata offer while it was still around.


That offer was only in the minds of Times Group journalists, it was not real.

24% @ 800 and 25% @ 150, averages to ~468 per share.

It is not who can buy these penny stocks, it is who can bring the WC going forward.


Tatas did talk to Jet on potential takeover, it got stuck on Goyal not willing to let go controlling stake. Maybe he thought he could play Tatas vs EY against each other and get the best offer. Unfortunately,Tatas didn't take the bait and he is in worse position now. Tatas board weren't too happy. They did do a due diligence of Jet's books, but later the board put brakes on it.

No offer yet, but we’re interested in Jet Airways: Tatas

“Over the last few days there has been growing speculation in the print and electronic media about Tata’s interest in Jet Airways,” Tata Sons said after a board meeting.

“We would like to clarify that any such discussions have been preliminary and no proposal has been made.”
...
Mint reported on 13 November that an in-house team of Tata Sons is conducting due diligence of Jet Airways (India) Ltd.

It also reported that Saurabh Agrawal, chief financial officer (CFO), is leading the discussions for Tata Sons while Jet Airways is represented by Goyal. “There are several issues which need to ironed out,” said the first person mentioned above.
 
User avatar
lightsaber
Moderator
Posts: 18411
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 2:37 pm

Etihad has dismissed talks of them infusing cash into Jet as mere speculation.
https://www.msn.com/en-ae/news/other/et ... ar-BBSjS7E

My take is they are not being given a large enough share/control for the new money.

So at this time, there is no bailout. :(

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:00 pm

Maybe stock exchanges and the regulator should halt trading until this issue is resolved. Media manipulating the stock value with speculation for so long and everyone including regulators seems to be fine with it. Unique and weird.
 
VTORD
Posts: 586
Joined: Sat Dec 22, 2012 9:45 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:12 pm

avier wrote:
So that's EY arm twisting 9W now. If NG's out, they need an Indian partner to fill up that role, where none want to participate knowing the nature of the industry. It's up to EY now to look for that Indian partner. They obviously just can't get NG out and have the airline to themselves, so wonder what's their plan post getting him out.

I just hope TATA's don't participate with EY on this, knowing their nature now and being the worst of the ME3.

EY isn't taking their chances with NG anymore I guess. The last time they invested money in him, they had to also buy 5 AI 77Ls only to see him get promptly in bed with DL/AF/KL! If they are going to invest in 9W at a time when they themselves are not in the best financial shape, they are going to want their pound of flesh. Don't see why they should be labeled "worst of the ME3" for acting in their own best interest.
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:33 pm

This is not good. Not clear it is 9W related but allegedly, Indian Customs rejected an export application for a defaulted Cape Town lease. India is going backward.

https://twitter.com/Deaphen/status/1085455481026564097
 
CaliguyNYC
Posts: 1112
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:53 pm

This is so weird - Jet/EY, Jet/Tata, Jet/DL - I mean is Goyal a business man or just a game player. He needs to close a deal and stop playing games. If Tatas are serious I think they should swoop in now and negotiate hard but fair. I mean how does anything get done in india. I am surprised Walmart was able to buy Flipkart. Btw I think EY is being foolish. A strong 9W eventually helps EY and the UAE. All these airlines are so myopic in thinking that any control of 9W should mean 9W just pushes all traffic through AUH or DOH or whatever. Such a silly shortsighted move.
 
P1aneMad
Posts: 389
Joined: Thu Jan 26, 2017 2:05 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 3:54 pm

Indian refusing to adhere to an agreement it is party off just to allow Jet Airways to keep a facade of normalcy will only hurt all other Indian carriers.
Despite being good customers of lease companies who pay their dues promptly they will face increased scrutiny and possibly more expensive rates in future deals due to country risk.
 
User avatar
lightsaber
Moderator
Posts: 18411
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 4:00 pm

dtw2hyd wrote:
This is not good. Not clear it is 9W related but allegedly, Indian Customs rejected an export application for a defaulted Cape Town lease. India is going backward.

https://twitter.com/Deaphen/status/1085455481026564097

That is huge and has implications (future costs) for all Indian airlines. If credit tightens further...

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
smartplane
Posts: 1098
Joined: Fri Aug 03, 2018 9:23 pm

Re: Jet Airways: reports cash running out

Wed Jan 16, 2019 4:06 pm

lightsaber wrote:
dtw2hyd wrote:
This is not good. Not clear it is 9W related but allegedly, Indian Customs rejected an export application for a defaulted Cape Town lease. India is going backward.

https://twitter.com/Deaphen/status/1085455481026564097

That is huge and has implications (future costs) for all Indian airlines. If credit tightens further...

Lightsaber

Increase margins and premiums, including EXIM.

Makes leasor's less likely / willing to work around issues, and more likely to default undelivered new aircraft, and just simply find them a better, less hassle homes.
 
lutfi
Posts: 885
Joined: Wed Sep 27, 2000 6:33 pm

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 12:57 am

I would think the equity injection is less important than the loan guarantees...
 
User avatar
BawliBooch
Posts: 1373
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 2:14 am

CaliguyNYC wrote:
This is so weird - Jet/EY, Jet/Tata, Jet/DL - I mean is Goyal a business man or just a game player. He needs to close a deal and stop playing games. If Tatas are serious I think they should swoop in now and negotiate hard but fair. I mean how does anything get done in india. I am surprised Walmart was able to buy Flipkart. Btw I think EY is being foolish. A strong 9W eventually helps EY and the UAE. All these airlines are so myopic in thinking that any control of 9W should mean 9W just pushes all traffic through AUH or DOH or whatever. Such a silly shortsighted move.

Goyal and the Jet management know exactly who they are talking to and what they are talking about. All the speculation on forums like ANET, driven by poorly written hatchets jobs from Times Group news media is just that - SPECULATION.

IMO, I do not think any stake sale will happen unless Jet gets it WC issues sorted out. And for that my bets are still on a consortium of variously willing State owned banks being goaded into sanctioning the amounts needed to keep Jet afloat.
Mr.Kapoor's favorite poodle!
 
JoeCanuck
Posts: 4704
Joined: Mon Dec 19, 2005 3:30 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 3:10 am

lightsaber wrote:
dtw2hyd wrote:
If 9W owes $150 Million and 18 used CFM56s are at best worth $90 Million, 9W should just find another MRO partner. I don't think 9W needs 18 CFM56 spare engines.

I missed it was that much. 18 CFM57-7 engines are, as you note, at most worth $90 million. I overlooked the total debt. Ouch.

Yes, best to find a new MRO.

Lightsaber


That could be tough to do. If they show they are willing to run away from companies they owe money to, any new MRO is going to want cash up front for any work...cash they don't seem to have.
What the...?
 
User avatar
Spiderguy252
Posts: 1132
Joined: Mon Feb 02, 2009 10:58 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 7:27 am

BawliBooch wrote:
Goyal and the Jet management know exactly who they are talking to and what they are talking about. All the speculation on forums like ANET, driven by poorly written hatchets jobs from Times Group news media is just that - SPECULATION.

IMO, I do not think any stake sale will happen unless Jet gets it WC issues sorted out. And for that my bets are still on a consortium of variously willing State owned banks being goaded into sanctioning the amounts needed to keep Jet afloat.


In your opinion, what is the timeline you are projecting for this to happen?
Vahroone
 
blrsea
Posts: 1919
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 8:21 am

Naresh Goyal willing to infuse about Rs 700 crores into Jet provided his shareholding doesn't fall below 25%. Selfish of him to say the least. Would rather the company go down affecting all employees than let go of control. There were multiple reports that the CEOs were never given free hand and thats why so many CEOs changed at Jet over the last few years.

PTI report being carried in multiple sites, not Times group ones, though majority of reports posted earlier in thread is from multiple media outlets like Reuters, Bloomberg, LiveMint, Business standard, CNBCTV18 channel and of course Times group. Of course, its up to individuals to believe what they want to. If the news was patently false, Jet would have issued a strong denial, after all its business would be impacted. But all it has said earlier was "we don't respond to speculations". The reports on EY offer was based on a journo seeing the letter written to SBI. And the report below says the PTI journo has seen the letter sent to SBI by Goyal.

Naresh Goyal ready to invest Rs 700 crore in Jet Airways

Jet Airways chairman Naresh Goyal is ready to invest up to Rs 700 crore in Jet Airways on the condition that his stake does not fall below 25%.
...
In a letter to SBI chairman Rajnish Kumar, Goyal said he is writing with reference to the resolution plan under discussion and in view of Etihad’s position, “despite the significant cash crunch and imminent grounding, which the airline is facing”.

Naresh Goyal said he was committed to an “infusion of funds into the company to the extent of Rs 700 crore” and pledging all his shares. This is subject to the condition that his shareholding post such infusion remained at least 25%, he said in the letter, which was seen by PTI.

“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%) without triggering the Takeover Code,” according to the letter.
...
...
 
avier
Posts: 921
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 11:40 am

So much attachment for his company. He thinks he is immortal and will be forever with 9W. I wonder if his future generation would share the same sentiments as him for the airline. He is 70. It's a good time for him to say goodbye and allow the airline to continue, but without him.
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 11:53 am

Well, NG is one of person(s) introduced hot cash to Indian aviation. He might have lost the channels to source $$Billions to have a well-run airline, but the old man still has some tricks up his sleeves.

The problem is WC and everyone working on equity(paper) transfer, which is not going to bring a single dollar to improve cash flow.
 
User avatar
BawliBooch
Posts: 1373
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 12:00 pm

Spiderguy252 wrote:
In your opinion, what is the timeline you are projecting for this to happen?



Posted reply in the thread in Non-Aviation.

viewtopic.php?f=11&t=1406473&p=21016825#p21016825
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 5:29 pm

Weren't all Indian banks supposed to line up at Naresh Goyal's office to offer him thousands of crores? I wonder why not a single rupee has come in so far. Looks like in Naya Hindustan bankers do not dance to the tunes of the powers that be,

I hope CSIA has a plan in place to ensure equitable redistribution of slots that Jet will soon be vacating to avoid a repeat of the post Kingfisher situation where IndiGo gobbled up neatly all of the vacated slots. The grapevine has it that IndiGo is in talks with lessors to induct more A320ceos at an accelerated rate to grab slots at BOM and DEL
17April2019: RIP Jet Airways
 
User avatar
Viman
Posts: 61
Joined: Sun Nov 25, 2018 3:30 pm

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 9:30 pm

Naresh Goyal is an egomaniac, he will take down the entire company rather than give up control. First Tata and now Etihad have shown him the reality. Naresh will be back selling tickets as ticket agent just like his old Dawood Ibrahim days.
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Jan 17, 2019 11:59 pm

The first rule of Indian capitalism is there are only sick companies, there are no sick promoters. I am sure NG has siphoned off enough money over the years to sustain his family for a few generations
17April2019: RIP Jet Airways
 
User avatar
Viman
Posts: 61
Joined: Sun Nov 25, 2018 3:30 pm

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 12:39 am

unrave wrote:
The first rule of Indian capitalism is there are only sick companies, there are no sick promoters. I am sure NG has siphoned off enough money over the years to sustain his family for a few generations


It was just a jibe from my side, I know Naresh would have learnt few lessons on money laundering from Dawood Ibrahim himself.
 
blrsea
Posts: 1919
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 1:58 am

Lenders to 9W will have to write a portion of their loan, only question is how much they will! And appears that Goyal hasn't put in any money over the last few years even as the company was losing money.

Lenders of debt-laden Jet Airways likely to write off up to 25% of loans

The lenders to Jet Airways, led by State Bank of India (SBI), might take a haircut (write-off) of up to 25 per cent on the airline’s Rs 8,500-crore debt.

The resolution plan in this regard would be ready by mid-February. By then, Etihad Airlines, which owns 24 per cent in Jet, aims to conclude its own examination ('due diligence') on the airline's issues.


A banking source said banks will have to make provisions for 15 per cent of the exposure to Jet Airways, as per the RBI's existing norms. Besides they have a window post-default to find a solution to an account, to avoid coming under the ambit of the Reserve Bank of India's circular of February 12 last year which bans any debt restructuring. An appeal against the circular is before the Supreme Court.
...
...
A letter sent by Etihad on Tuesday states the former was the only shareholder that had arranged or procured significant funding for the airline since 2013. “Etihad has been urging Naresh Goyal (chairman of Jet Airways) to invest further funds into the business for the past three years. We are, once again, willing to step up and inject new capital into the business on acceptable terms and conditions. It is only at this stage, after the company has defaulted to its lenders, that Goyal has made offers to bring in a small amount of additional capital,” Etihad Chief Executive Tony Douglas wrote, in a communication to both SBI and the aviation ministry. Adding: “Therefore, I reconfirm that the additional fund support being requested from Indian lenders will not have pledge of shares of Etihad nor any kind of corporate guarantee from Etihad.. (though) Etihad would facilitate discussions with HSBC and Mashreq for terming out the existing facilities. But, we would not be able to persuade them to provide additional funding support."

Douglas also warned of an imminent risk that the lessors of planes to Jet could ensure a grounding of the aircraft, trigerring a cessation of operations. “Further, the business is unable to fund continuing operations from the end of this week, without immediate and substantial additional funding. The company has also informed us that your team is fully aware of this. I am concerned that without emergency funding to the company, our joint efforts to formulate a resolution plan will run out of time.
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 2:58 am

Jet Airways IPO share price: Rs 1100
Jet Airways current share price: Rs 285
Value destroyed: 75%

Etihad investment in 2013: Rs 2100 cr
Current market value: Rs 770 cr
Etihad valuation of current market value: Rs 412 cr
Value destroyed: 80%

Given the past credentials of this stock it makes no sense for banks to take up equity position in Jet.
17April2019: RIP Jet Airways
 
User avatar
BawliBooch
Posts: 1373
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 3:22 am

Jet share price has seen such wild fluctuation even before and recovered. Multiple times. This is normal in the stock market.

Hardly the basis for forecasting demise of an airline! Which some have been doing for months without basis!

Jet has to get it's WC issue sorted out and is in talks with banks. There are some reports in the media that the state banks are "being convinced" to bail out Jet.

As was discussed on the thread in Non-Av forum, if Piyush Goyal is made the temp Finance Minister, then the bailout is a certainty. LIC could well be the angel investor! Mark this post!

Moderators: can we please end the baseless speculation on "doomsday for Jet" that has been going on for months on this topic?
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 4:33 am

Continuous decline of share price over a long period is one of the most reliable indicators of fundamental problems with the operational and/or financial structure of a company.
17April2019: RIP Jet Airways
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 11:49 am

I think new bankruptcy law enables NG to continue this game forever, banks have no option other than writing off liabilities. As long as he holds on to AOC and Mumbai slots he can induce enough pain/misery on PSBs and competition wishing him to disappear.

Also, 9W probably gets quite a bit of revenue by placing codes on others, his travel agent brain still active. I am sure he still has connections in TA community to keep this going.

All 9W need is Mumbai slots and just enough planes to do 28 domestic round trips from Mumbai.

So the competition wish will never come true. Bangalore may be the sore loser if 9W drops the station in this mess.
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Fri Jan 18, 2019 12:03 pm

No it doesn't. In fact the IBC curbs the rampant practice of evergreening of loans by pliant bankers under pressure from their political masters. One of the underpinnings of the IBC is that existing promoters are chucked out post NCLT proceedings. Numerous cases have seen change of promoters along with a haircut
17April2019: RIP Jet Airways
 
Bhadra
Posts: 44
Joined: Tue Aug 28, 2018 11:21 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 7:58 am

dtw2hyd wrote:
I think new bankruptcy law enables NG to continue this game forever, banks have no option other than writing off liabilities.


Not true, at all. On the contrary, once the bankruptcy proceedings are initiated by lenders, related parties (of the current promoters) cannot participate in the resolution plan. Though IBC(2016) is very young, we've seen several examples and famous SC judgements on the matter (in the case of Essar Steel).
 
User avatar
BawliBooch
Posts: 1373
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 8:35 am

dtw2hyd wrote:
I think new bankruptcy law enables NG to continue this game forever, banks have no option other than writing off liabilities. As long as he holds on to AOC and Mumbai slots he can induce enough pain/misery on PSBs and competition wishing him to disappear.

While "evergreening" of loans in the old sense of the term is not possible anymore, there are workarounds. The good ol' desi jugaad which will work based on who you know! Many companies have taken to this alternative. The calls to Insurance companies for investment is one indicator of the options being considered. Lets discuss this over in the Non-Av thread! :)

dtw2hyd wrote:
Also, 9W probably gets quite a bit of revenue by placing codes on others, his travel agent brain still active. I am sure he still has connections in TA community to keep this going.

All 9W need is Mumbai slots and just enough planes to do 28 domestic round trips from Mumbai.

Absolutely! The key for Jet now is to defend its fortress hub in BOM even if it has to drawdown ops from other stations like CCU. The big bad blue bully cannot sustain this campaign for much longer. With 1/3rd of its own fleet in the hangars, it is facing serious pressures too! The big bad blue bully's Gurgaon team and its SM consultants will soon have to find someone more vulnerable than Jet. SpiceJet comes to mind.

dtw2hyd wrote:
So the competition wish will never come true. Bangalore may be the sore loser if 9W drops the station in this mess.

I would HATE for that to happen. Bangalore will be key to Jet recovery in the future. If they have to withdraw from some bases to survice, I hope it will be AMD, HYD and CCU in that order.
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 9:38 am

It's going to be a quiet few days as the negotiations take place behind the scene, so it is a good time to evaluate the different options now. Fair warning: This post will be numbers heavy, so many not be suitable for everyone ;)

Etihad's offer
Willing to invest further at only Rs. 150 a share and increase share holding to 49%
At the same time bankers will convert Rs 2000 crore debt to equity. (There are some reports that Banks will write off this debt, but that's just Indian journalism.)
We do not know what price will banks make this conversion, but we can assume this will also be at the same price. It would be a scandal if it isn't so.
We also know that this conversion will fetch banks an equity holding of 40% in Jet.
Armed with this info, and some excel jugglery, we can arrive at the amount to be invested by Etihad: Rs 1500 crore

Issues with this option:
Rs 150 is too low a share price than what regulations require. There has been no precedence of this requirement being waived.
Etihad increasing its share price will trigger the takeover code which requires an open offer to be made to minority shareholders, but there is precedence of this requirement being waived, most famously in the case of Ajay Singh's take over of SpiceJet.
Most importantly, this buys about 2-3 years' time for Jet and we are back to square one.

Winners: Etihad, banks (sort of), lessors
Losers: Naresh Goyal, minority shareholders
17April2019: RIP Jet Airways
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 10:17 am

Naresh Goyal's offer
Willing to invest Rs 700 crore for a residual shareholding of 25%
This option would see Etihad not investing anything further. I am not very sure if banks will be able to restructure debt here, but assuming they do and assuming they convert at the same ratio as before, the numbers wouldn't tally. There cannot be a scenario where NG gets to keep 25% without the banks taking a substantially higher equity position
This offer is dead on arrival (with the information we know now)

IBC
If the stalemate continues, the banks will eventually invoke the IBC and seek outside investors. What happens then is dependent on somebody actually bidding for airline . From past experience no Indian airline has successfully resumed operations post bankruptcy proceedings so the chances of someone bidding is actually low.

Assuming the airline is revived:
Winners: Banks (sort of), lessors
Losers: Etihad, NG, minority shareholders

The best option is to go with Eithad's offer and lobby hard for exemptions.
The next few weeks are going to be very interesting. We haven't seen such a high profile corporate drama in a long time in India.
17April2019: RIP Jet Airways
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 10:32 am

One more thing, the first reports about Jet running out of money appeared 5 months bank, giving 2 months before cash runs out. The money lasted 4 months, helped by Boeing returning incentives. The reports were almost spot on.
17April2019: RIP Jet Airways
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 11:44 am

BawliBooch wrote:
dtw2hyd wrote:
So the competition wish will never come true. Bangalore may be the sore loser if 9W drops the station in this mess.

I would HATE for that to happen. Bangalore will be key to Jet recovery in the future. If they have to withdraw from some bases to survice, I hope it will be AMD, HYD and CCU in that order.


I am not even picturing any other station having more that one or two daily RT from BOM.

Mumbai is the fanny pack, Delhi is the under seat personal item, Bangalore is the carry-on in the overhead and rest is checked baggage. In a crash scenario, priorities will be very clear.

It is competitors wishful thinking that 9W would give up Mumbai slots, the fanny pack is not going anywhere. All they can do is grab more BLR slots.

Also, all original private aviation founders have few things in common, they will never let go 1) AOC, 2) a Dozen ATRs 3) Access to government/hot cash. Jet Lite AOC is still active, there are 15 ATRs and rest is in order. You can kick NG out of 9W but not from Indian aviation. Vijay Mallya had the same wishlist but didn't work out because he left the country.
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 11:47 am

Jet Lite AOC is active because of an ongoing legal dispute. The management has tried to merge the AOCs but the courts/govt shot them down
17April2019: RIP Jet Airways
 
ssreekanth2000
Posts: 31
Joined: Fri Aug 11, 2017 1:11 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 12:07 pm

dtw2hyd wrote:
BawliBooch wrote:
dtw2hyd wrote:
So the competition wish will never come true. Bangalore may be the sore loser if 9W drops the station in this mess.

I would HATE for that to happen. Bangalore will be key to Jet recovery in the future. If they have to withdraw from some bases to survice, I hope it will be AMD, HYD and CCU in that order.


I am not even picturing any other station having more that one or two daily RT from BOM.

Mumbai is the fanny pack, Delhi is the under seat personal item, Bangalore is the carry-on in the overhead and rest is checked baggage. In a crash scenario, priorities will be very clear.

It is competitors wishful thinking that 9W would give up Mumbai slots, the fanny pack is not going anywhere. All they can do is grab more BLR slots.

Also, all original private aviation founders have few things in common, they will never let go 1) AOC, 2) a Dozen ATRs 3) Access to government/hot cash. Jet Lite AOC is still active, there are 15 ATRs and rest is in order. You can kick NG out of 9W but not from Indian aviation. Vijay Mallya had the same wishlist but didn't work out because he left the country.


Why the dozen ATRs?
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 12:49 pm

ssreekanth2000 wrote:
...
Why the dozen ATRs?


I can only guess, probably it is the right number to have a nationwide presence. In case of VM, 13 x ATRs were leased thru their own shell leasing companies in the Cayman Islands. If I am not mistaken other than handful auctioned off by the tax department, rest are still at MAA.

NG publicly stated he can bring 700 crores to Jet Airways, he can invest that in Jet Lite.
 
avier
Posts: 921
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 1:19 pm

dtw2hyd wrote:

Mumbai is the fanny pack, Delhi is the under seat personal item, Bangalore is the carry-on in the overhead and rest is checked baggage. In a crash scenario, priorities will be very clear.

It is competitors wishful thinking that 9W would give up Mumbai slots, the fanny pack is not going anywhere. All they can do is grab more BLR slots.



If 9W does survive, I'm curious to see 6E's future plans for Mumbai. Like I had mentioned in the other Indian Av. thread recently, I'm curious to see the govt. policy when the new NMIA opens, in regards to airline allocation being allowed at only one airport or open to operate at both simultaneously.

That will either work towards benefiting 9W's or 6E's expansion.
 
dtw2hyd
Posts: 7297
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 2:22 pm

avier wrote:
...
If 9W does survive, I'm curious to see 6E's future plans for Mumbai. Like I had mentioned in the other Indian Av. thread recently, I'm curious to see the govt. policy when the new NMIA opens, in regards to airline allocation being allowed at only one airport or open to operate at both simultaneously.

That will either work towards benefiting 9W's or 6E's expansion.


You cannot solve an infrastructure issue by pushing competitors out of business. If the growth rate estimates are true, current airports are not big enough for a single airline.
 
CaliguyNYC
Posts: 1112
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 3:31 pm

dtw2hyd wrote:
avier wrote:
...
If 9W does survive, I'm curious to see 6E's future plans for Mumbai. Like I had mentioned in the other Indian Av. thread recently, I'm curious to see the govt. policy when the new NMIA opens, in regards to airline allocation being allowed at only one airport or open to operate at both simultaneously.

That will either work towards benefiting 9W's or 6E's expansion.


You cannot solve an infrastructure issue by pushing competitors out of business. If the growth rate estimates are true, current airports are not big enough for a single airline.


Agreed people want the ME3 for competition and low prices but root for Jet and others to close.
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 3:42 pm

CaliguyNYC wrote:
Agreed people want the ME3 for competition and low prices but root for Jet and others to close.

Losing Jet will be a huge setback for international connectivity for many regions in India.
17April2019: RIP Jet Airways
 
User avatar
unrave
Posts: 2682
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Jan 19, 2019 4:37 pm

Hard to find something more vulnerable than a bankrupt airline facing an uncertain future
17April2019: RIP Jet Airways

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos