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BawliBooch
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 4:16 pm

There is one way out for Naresh Goyal. He still owns the JetLite (former Sahara) brand which he has smartly retained the AOC for. 1 73G, 6 738 and 3/4 739ERs are on S2's register though they now fly for Jet.

Dump stake in Jet and revive the S2 AOC maybe with a fresh branding. 11 737's can be used to maintain their BOM fortress hub. Since S2 is debt free, Goyal can make a fresh start.

The boys in Gurgaon will be well and truly s****d. Their future profitability rests on getting slots in BOM which they will never get if jet lives on as S2!

Naresh is a smart guy. Smarter than some of the trolls on Social media. I am sure he has thought this through!
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unrave
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 4:28 pm

A hypothetical 11 aircraft strong airline cannot have a FORTRESS hub even at Mangalore.

Also:
Naresh Goyal doesn't own JetLite
Jet Airways (India) Limited wholly owns Jet Lite (India) Limited
Naresh Goyal gets to control Jet Lite by virtue of his majority ownership of Jet Airways (India) Limited
When Naresh Goyal is kicked out of Jet Airways (India) Limited he automatically loses control of Jet Lite (India) Limited
One can't revive the AOC of an airline one doesn't control ¯\_(ツ)_/¯
17April2019: RIP Jet Airways
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 4:45 pm

There was once a bankrupt airline in Europe, not too long ago, which reinvented itself in a new avatar using the AOC of a subsidiary.

Any guesses which one?

These 11 aircraft on S2 register is just to keep the AOC alive! It could serve a similar purpose now. Naresh Goyal was clearly planning ahead!

Remember how Jet placed an order of 75+75 MAX planes in 2015 followed by another 75 plane order a few months later? I wonder if both the orders booked with Boeing were for the same AOC?

People underestimate Naresh Goyal.
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unrave
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 4:52 pm

Naresh Goyal was thinking so far ahead that he actually got a board resolution passed for the merger of the two AOCs in 2015 and got HC approval for the same in 2016. Only to be shot down by the MoCA. Must be a genius wonly.

Only the entity that controls Jet Airways can control Jet Lite (and naturally their respective AOCs). That is the corporate structure of Jet.

Edit: Jet's structure is quite difference from Swissair-Crossair
17April2019: RIP Jet Airways
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:10 pm

NG can juggle his stake along with his allies to make this plan work. It remains a possibility.

Wanted to ask another question to members with knowledge of Jet - it was speculated on this forum that Jet is pulling out of Kerala-Gulf sectors. Has this actually happened?

Plenty of Jet flights still seem to be operating Kerala to the Middle East! Mystery wonly! Have they withdrawn?

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CaliguyNYC
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:11 pm

Indigo already has a huge portion of BOM slots. Feel the GOI shouldn’t give anything to Indigo. It should ensure there is strong competition at BOM. That said, the GOI should not let Jet die. All the loans they have given JET should give them some control. At some point Goyal will have to go (unless he convinces someone for money). I feel like the GOI has TATAs in the background just in case Jet is about to go under.
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:16 pm

CaliguyNYC wrote:
That said, the GOI should not let Jet die. All the loans they have given JET should give them some control.

At some point Goyal will have to go (unless he convinces someone for money). I feel like the GOI has TATAs in the background just in case Jet is about to go under.


In a free market, the Govt should keep out. Unfortunately in India they don't! :(

IMO, Tata's will stay clear of Jet. The keys to Jet turnaround are two Indian NBFC's, a company based in Sharjah, another in the Isle of Man and of course the JetLite AOC.

The boys in Gurgaon played well. They just got out played by their Pappa!
Last edited by BawliBooch on Sun Jan 20, 2019 5:22 pm, edited 3 times in total.
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unrave
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:16 pm

Jet is closing Sharjah and Muscat in February (along with 7 other domestic destinations)
17April2019: RIP Jet Airways
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:19 pm

Last I read Jet is closing Gulf routes in December. Now we are are being told Feb!

FR24 a few minutes back was showing COK-SHJ. Don't know whether Jet is actually going to stop?

Image

Or perhaps FR24 is fake data?
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lightsaber
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:29 pm

As noted above, there is no company more vulnerable than a bankrupt airline.

Negotiations after an obvious bankruptcy means little, if any, leverage. EY should pick a less costly partner to invest in: SpiceJet or GoAir. I exclude Indiggo as they will partner with TK and probably QR.

It will be interesting to see the end game for Jet. Everything is game at this point, but whomever invests needs deep pockets.

unrave wrote:
Jet is closing Sharjah and Muscat in February (along with 7 other domestic destinations)

What fraction of ASKs has Jet shrunk already?
What further fraction of peak service do they plan to shrink?
What is Jet's anticipated 2Q2019 (calendar quarter) market share?

To be of value, they need the network effect (scale). Will they have enough?

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unrave
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Re: Jet Airways: reports cash running out

Sun Jan 20, 2019 5:42 pm

lightsaber wrote:

To be of value, they need the network effect (scale). Will they have enough?
Lightsaber


As of now, the only value Jet has are for the 16 planes they own and their slots at BOM and DEL (their slots at LHR have been leased from EY), but their liabilities far outweigh them. Unless a very large portion of its debt is restructured it cannot sustain its operations, but the process takes a long time in India. The end game is going to be very interesting indeed.
17April2019: RIP Jet Airways
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 7:26 am

Banks want Naresh Goyal to invest at least Rs 2500 - 3000 crore for restructuring. The deadline is 30June19 - six months from the default- beyond which NCLT will take over.
https://www.dnaindia.com/business/repor ... ys-2710230

@Bhadra: Do you know what happens if nobody bids for a company under the IBC?
17April2019: RIP Jet Airways
 
blrsea
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 1:25 pm

unrave wrote:
Banks want Naresh Goyal to invest at least Rs 2500 - 3000 crore for restructuring. The deadline is 30June19 - six months from the default- beyond which NCLT will take over.
https://www.dnaindia.com/business/repor ... ys-2710230

@Bhadra: Do you know what happens if nobody bids for a company under the IBC?


AFAIK, the company can be liquidated if no one bids. However, this is a company which has a negative net worth. So the banks will also not be willing to take it to IBC quickly and would prefer a non-IBC solution in the hope they can recover some money.

Jet lenders expect a clearer view on capital infusion from Etihad this week

Indian banks, which were taken aback by Etihad’s stiff conditions — as outlined in a recent letter from Etihad CEO Tony Douglas to SBINSE -0.85 % chairman Rajnish Kumar — have stated their position unequivocally to Etihad. The Indian lenders are understood to have told Etihad that some of its conditions were unrealistic and any move to recapitalise Jet and restructure the company’s debts must happen within the regulatory framework.

“Etihad has agreed to comeback by Wednesday. The views are also being put across through diplomatic channels,” a person familiar with the negotiations told ET.

The final report on Jet’s forensic audit is also expected this week.
...
Also, no creditor in India has filed a bankruptcy petition against an airline till now. “Though this has happened abroad, there is a fear of the unknown among Indian banks. While some of the large industry houses may be interested in putting in bids, the challenge is to complete the process in a time-bound manner,” said the person.
...
 
edealinfo
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 7:22 pm

The latest news is that Etihad proposes increasing its stake to 49% via a "rights issue" to existing shareholders at about $160 a share. This method of issuing shares by Jet helps skirt the SEBI's methodology of determining the share price (which would otherwise have been higher). What is puzzling to me is if all the shareholders have a "right" to subscribe to new shares, wouldn't Naresh Goyal too subscribe to it given that the shares would only cost 160 rupees per share which is a bargain compared to the existing market price of approx. 285 rupees per share.

Elsewhere in the article, it states that banks will get to convert their debt at only Rupee 1 per share which doesn't make any sense. Could someone explain this?
https://www.ndtv.com/business/etihad-pr ... ys-1981074
 
edealinfo
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 7:50 pm

Some mentioned that the value of Jet Airways lies primarily in the slots that it has at Mumbai and New Delhi airports and the 16 aircraft that it owns. My questions are:
1) How many pairs of slots does it have at Mumbai and New Delhi and what % do these represent of the total slots at those airports, respectively?
2) What has it not been able to monetize the aircraft that it owns? Is there no market for it or are the prices depressed for the aircraft it owns?
 
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 8:16 pm

blrsea wrote:
unrave wrote:
Banks want Naresh Goyal to invest at least Rs 2500 - 3000 crore for restructuring. The deadline is 30June19 - six months from the default- beyond which NCLT will take over.
https://www.dnaindia.com/business/repor ... ys-2710230

@Bhadra: Do you know what happens if nobody bids for a company under the IBC?


AFAIK, the company can be liquidated if no one bids. However, this is a company which has a negative net worth. So the banks will also not be willing to take it to IBC quickly and would prefer a non-IBC solution in the hope they can recover some money.

Jet lenders expect a clearer view on capital infusion from Etihad this week

Indian banks, which were taken aback by Etihad’s stiff conditions — as outlined in a recent letter from Etihad CEO Tony Douglas to SBINSE -0.85 % chairman Rajnish Kumar — have stated their position unequivocally to Etihad. The Indian lenders are understood to have told Etihad that some of its conditions were unrealistic and any move to recapitalise Jet and restructure the company’s debts must happen within the regulatory framework.

“Etihad has agreed to comeback by Wednesday. The views are also being put across through diplomatic channels,” a person familiar with the negotiations told ET.

The final report on Jet’s forensic audit is also expected this week.
...
Also, no creditor in India has filed a bankruptcy petition against an airline till now. “Though this has happened abroad, there is a fear of the unknown among Indian banks. While some of the large industry houses may be interested in putting in bids, the challenge is to complete the process in a time-bound manner,” said the person.
...



To help put this in perspective, 9W losses over 1,000 crore per quarter and has over 8,000 crore in debt.

I find it interesting Etihad's conditions were rejected. They probably will come back with somewhat better terms. But if the banks want too much, they should cut their losses. What facinating high stakes poker. Does Etihad put more in the pot or fold?

Goyal offered 700 crore or about 2 months of losses. Past due vendor bills are at least $150+ million usd. Leases?

Everyone is getting a haircut on this deal.

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edealinfo
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 8:35 pm

>>Does Etihad put more in the pot or fold?

This is an extremely difficult choice for Etihad. They invested $$$$$$ in acquiring the initial 24% stake in Jet Airways plus additional $$$$$ for the 49% take in Jet's Frequent Flyer business. If they let Jet collapse now, they will lose that investment entirely.

Where others see sand, I see some specks of gold. Allow me to explain. The UAE India bilateral is at its max and the Government is loathe to increase the bilateral rights. This means that those carriers that already have rights to fly UAE-India, have "value"/"specks of gold" in those "rights". Since Jet gobbled up most of the Abu Dhabi - India rights, it has intrinsic value, which will only go up with time as the UAE-India bilateral rights will no longer be allowed to increase anywhere close to what it was allowed to increase as in the past. By exercising control over Jet's "rights" (via code-share flights), Etihad, in effect, will by some measure at least, offer some level of competition with its other ME3 competitors namely, Emirates and Qatar.

Stated another way, Jet's AUH - India "rights" could someday be as valuable as it Mumbai slots. (This is somewhat an exaggerated statement but you get my point).
 
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 8:47 pm

If 9W was to fold 5 months back, PSBs giving another six months to come up with 3000Cr is at best suspicious. Something is cooking in the background. Who will fund 9W for next six months??

9W is the best performing investment EY made, in relative terms. 90K seats/week and access to almost any station are worth more than $300+ Million, so EY will not let go so 9W easily. NG will not let go 9W easily.

Only history will tell who played who? NG, EY, GoI, PSBs and some others.
 
edealinfo
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 8:58 pm

>>>Who will fund 9W for next six months??

For sure, the Government will not let Jet to collapse before the elections. In the end, all the parties will do what they do best -- get into bed with each other. So, don't be surprised if that bed holds Naresh Goyal, politicians, the Government, Etihad, the banks, and the PSUs (those that supply fuel, run airports, etc.)
 
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 9:05 pm

edealinfo wrote:
>>Does Etihad put more in the pot or fold?

This is an extremely difficult choice for Etihad. They invested $$$$$$ in acquiring the initial 24% stake in Jet Airways plus additional $$$$$ for the 49% take in Jet's Frequent Flyer business. If they let Jet collapse now, they will lose that investment entirely.

Where others see sand, I see some specks of gold. Allow me to explain. The UAE India bilateral is at its max and the Government is loathe to increase the bilateral rights. This means that those carriers that already have rights to fly UAE-India, have "value"/"specks of gold" in those "rights". Since Jet gobbled up most of the Abu Dhabi - India rights, it has intrinsic value, which will only go up with time as the UAE-India bilateral rights will no longer be allowed to increase anywhere close to what it was allowed to increase as in the past. By exercising control over Jet's "rights" (via code-share flights), Etihad, in effect, will by some measure at least, offer some level of competition with its other ME3 competitors namely, Emirates and Qatar.

Stated another way, Jet's AUH - India "rights" could someday be as valuable as it Mumbai slots. (This is somewhat an exaggerated statement but you get my point).

We can agree there is a value. But enough? Jet needs an incredible amount of cash and Abu Dhabi is running a deficit last I looked. They have assets, but a domestic budget and domestic corporations that need funds.

Jet has valuable rights, but I refused to spend $6,000 to 'save' (maintain) a car I had bought for $32,000 that, in good working order, was worth $5,000 or I sold it as is for $2,800 to someone who knew the clutch and differential were due for work, it needed new tires and brakes as well as the 2 year maintenance. The person had access to a lift and time to do $5,500 of the needed work.

In my opinion, that is where Jet is. The issue is EY only has so much cash. Is it better to realize the money in the pot is lost or go for broke?

e.g., partner with another Indian airline.

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Exeiowa
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 9:34 pm

Surely at this point their problem is other people who are not vested continue in extending credit, like the engine overhaul company or foreign airport fuel suppliers, leasing companies that have a tangible valuable asset that can be moved elsewhere, those that are not directly hurt if it blows up, but also not subject to pressure.

At some point people have to get paid. You cant keep hemorrhaging money with no plan to turn it around, only plans to keep the wolf from the door. Etihads investing strategy seems to almost be a guide to identify an airline that will give you results if you short sell it. Even they cant have an unending appetite for troubled airlines that constantly suck money. Its one thing losing your money in your country, at least it does some good, not so valuable losing it in another country.
 
CaliguyNYC
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 10:27 pm

edealinfo wrote:
>>Does Etihad put more in the pot or fold?

This is an extremely difficult choice for Etihad. They invested $$$$$$ in acquiring the initial 24% stake in Jet Airways plus additional $$$$$ for the 49% take in Jet's Frequent Flyer business. If they let Jet collapse now, they will lose that investment entirely.

Where others see sand, I see some specks of gold. Allow me to explain. The UAE India bilateral is at its max and the Government is loathe to increase the bilateral rights. This means that those carriers that already have rights to fly UAE-India, have "value"/"specks of gold" in those "rights". Since Jet gobbled up most of the Abu Dhabi - India rights, it has intrinsic value, which will only go up with time as the UAE-India bilateral rights will no longer be allowed to increase anywhere close to what it was allowed to increase as in the past. By exercising control over Jet's "rights" (via code-share flights), Etihad, in effect, will by some measure at least, offer some level of competition with its other ME3 competitors namely, Emirates and Qatar.

Stated another way, Jet's AUH - India "rights" could someday be as valuable as it Mumbai slots. (This is somewhat an exaggerated statement but you get my point).


Sorry I disagree. There just isn’t the level of traffic between India and AUH for all the seats allocated. In fact both EY and Jet/Indian carriers has unused seats (india definitely does). With EY canceling many of their US flights and downsizing the network, you dont need all those flights (basically the 4am departures from India feeding the main EY bank is all that is valauable). AUH is not DXB. Other than DXB and maybe Saudi, I can’t think of any ME markets who’s slots have intrinsic value.
 
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 10:29 pm

Exeiowa wrote:
Etihads investing strategy seems to almost be a guide to identify an airline that will give you results if you short sell it. Even they cant have an unending appetite for troubled airlines that constantly suck money. Its one thing losing your money in your country, at least it does some good, not so valuable losing it in another country.

:rotfl:
Yes, Etihad is an excellent counter investment indicator.

Abu Dhabi has liquidated too much in assets to want to liquidate a bunch more.

Hence the poker game analogy. Except in this game, the house took away 80% of the pot in fees (losses). So do you bet a bunch more for a small pot, or fold?

Jet was supposed to reform after Etihad's investment.

At this time, Etihad is in for the prior investments. It will depend on how much of a haircut everyone else is willing to take. If the answer is not enough, Etihad must walk. Control must change.

My prediction is this keeps going.

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edealinfo
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 11:09 pm

>>>There just isn’t the level of traffic between India and AUH for all the seats allocated.

While this may be true, this isn't looking at the big picture. As you are aware, the rights between India and DXB have long been exhausted (since Dec 2016, I believe). While everyone primarily wants to go to DXB in the UAE, the next reasonable alternatives are Sharjah and Abu Dhabi. And, this is why AUH is somewhat important because it also serves as a general gateway to the UAE for O & D traffic. That's why Indigo and Air India Express have filled up the "rights" to AUH where Jet hasn't completely exhausted it. Also note that DXB has no good slots, so, even if bilateral rights are expanded (unlikely on a medium or large scale), DXB simply doesn't offer commercially feasible slots. This is another reason why AUH becomes relatively important.

As far as I understand, virtually all of India's bilateral rights to the UAE are exhausted (DXB, Sharjah and yes, even AUH). If anyone thinks otherwise, please let me know how many seat-rights from India are still not utilized.

From what I understand from reading press reports, India may relax India-UAE rights just a "wee" bit to allow for 2 additional flights from UAE carriers to the newly opened Kannur airport. But that's the extent of any proposed bilateral expansion. Which is why, at this juncture, ANY of the EXISTING rights to the UAE, have value. The only issue is how much it is worth.
 
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Re: Jet Airways: reports cash running out

Mon Jan 21, 2019 11:58 pm

unrave wrote:
Banks want Naresh Goyal to invest at least Rs 2500 - 3000 crore for restructuring. The deadline is 30June19 - six months from the default- beyond which NCLT will take over.
https://www.dnaindia.com/business/repor ... ys-2710230

@Bhadra: Do you know what happens if nobody bids for a company under the IBC?


After the initiation of bankruptcy proceedings at NCLT, if there are 0 eligible bids (there can be multiple attempts here), theoretically, all assets of the corporation (tangible and intangible) go in for liquidation. In layman's terms, it'll go to the junkyard for whatever it's worth!! We, however, have to keep in mind that COC (Committee of Creditors), which would stand to lose the most in such a scenario will desperately try and prevent this from happening.

Plus, the eligibility to bid for a non performing asset is pretty liberal. Considering that one would get full management control of the corporation and almost none of its liabilities at the end of the process (this depends on the resolution plan BTW), I 'believe' that Jet Airways would be an attractive asset to acquire, if and when it's officially bankrupt (and certainly not before that point!! Read P.S.). Of course, the last statement is just my 'belief' and is purely speculative.

PS: If anyone listened to the con call of Indigo's Q2 results, there was a specific question on the topic and one could read a lot between the lines.
 
DarthLobster
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 12:09 am

Can’t we archive this one already??
 
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 12:43 am

DarthLobster wrote:
Can’t we archive this one already??

Why? It has just gotten interesting
17April2019: RIP Jet Airways
 
edealinfo
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 1:00 am

Here is "MY" resolution plan for Jet Airways. I can see that some of you will like to tear it apart after reading the first 4 bullets but, if that is the case, you should let me know your alternative plan.

1) Naresh Goyal to be named Chairman Emeritus in a purely ceremonial role (nothing more, period). [Give the old man his due for 25 years of service, blah, blah, blah; also it will be good for his ego and to ensure his co-operation.]

2) Naresh Goyal and his wife to resign from the Board (to ensure that they do not meddle in the day to day operations as they currently do).

3) Goyal gets to name two positions on the Board (that can't be him or his wife). No extended family member will be allowed to fill those positions with the sole exception of that of his son. Goyal needs his son on the Board to project that there is a peaceful resolution of all disputes, he is fading into retirement, and he is passing the torch (of his inheritance) "to the new/next generation" (or however he wishes to pitch it).

4) Goyal gets to keep 25% equity but needs to fork out the $700 crores he promised. The 25% allows him to continue to be a promoter and to block special resolutions.
(You may think I am out of my mind at this stage! However, this point is important because his holding 25% [though largely as a sleeping partner], helps, to some extent, project that "effective control" of the company is NOT with a foreign partner, which is a requirement per Indian regulations.

5) Etihad takes 49% equity (paying for it, of course) and asks for the Board to be largely comprised of seasoned professionals. They also get to name fill key positions within Jet including the Executive Chairman position. Maybe they should allow the current CEO (a professional) remain and use this as part of their argument that they are not in "effective control". The current CEO, along with the new Executive Chairman, unhinged from any interference from the Goyals, will then be able to execute on a new business plan.

6) The business plan should continue, at the minimum, to maintain the existing virtual metal neutral joint venture with Delta/KLM/Virgin/Air France. If Etihad needs additional connectivity through AUH, it can do so, but not as a replacement to the existing Jet Airways partnership with Delta/KLM/Virgin/Air France. The Goyals holding 25% will ensure that Jet doesn't just become a feeder for Etihad.

7) Jet takes delivery of the new 737 Max aircraft and replaces their 737 NG aircraft lowering their fuel costs.

8) Jet tries to create a fortress hub at Mumbai and a very strong one at New Delhi.

9) Jet axes their ATR aircraft and gets rids of unprofitable routes. They will focus on profitability over market share.

10) Jet to continue their code-shares and interline agreements with major carriers around the world and will seek to add more, if reasonable.

11) Banks should convert 20% of their loans to equity and restructure existing loans.

12) In time they will take delivery of the 787 aircraft to replace their Boeing 777 and or Airbus 330 aircraft.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 1:22 am

edealinfo wrote:
The latest news is that Etihad proposes increasing its stake to 49% via a "rights issue" to existing shareholders at about $160 a share. This method of issuing shares by Jet helps skirt the SEBI's methodology of determining the share price (which would otherwise have been higher). What is puzzling to me is if all the shareholders have a "right" to subscribe to new shares, wouldn't Naresh Goyal too subscribe to it given that the shares would only cost 160 rupees per share which is a bargain compared to the existing market price of approx. 285 rupees per share.



This has been reported on the basis of feed from IANS, so needs to be taken with a bucketload of salt.

Download the paper here to read more about rights issues in India: https://www.researchgate.net/publicatio ... s_in_India

Rights issues are typically used by family owned businesses to raise capital without dilution of family silver. I do not see how Etihad can have a rights issue and ensure stake dilution by NG.

Elsewhere in the article, it states that banks will get to convert their debt at only Rupee 1 per share which doesn't make any sense. Could someone explain this?
https://www.ndtv.com/business/etihad-pr ... ys-1981074

This makes no sense at all. If banks convert Rs. 1000 crore debt to equity at Re 1 per share they will be left with 1000 crore shares. That would make them 99.99% owners of Jet Airways

Bhadra wrote:
I 'believe' that Jet Airways would be an attractive asset to acquire, if and when it's officially bankrupt (and certainly not before that point!! Read P.S.). Of course, the last statement is just my 'belief' and is purely speculative.

PS: If anyone listened to the con call of Indigo's Q2 results, there was a specific question on the topic and one could read a lot between the lines.


Absolutely. If it means getting hold of all the slots of Jet, I can actually see IndiGo picking up Jet at a valuation of about 2000 cr. That is practically chump change for them. Competition Commission of India will make some noise but that's a pretty toothless organisation anyway.
17April2019: RIP Jet Airways
 
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 1:42 am

@edealinfo your point 6 is bound to happen this time because EY themselves are cooperating with AF KL.
About point 12, I don't think they should let the 77Ws let go. The routes where 77W is deployed are the most profitable for them. They should take 787-9s and expand internationally.
The best preparation for tomorrow is doing your best today
 
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lightsaber
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 2:01 am

LoL

Yes, the end game is just for entertainment. ;)

Jet is effectively done. Now the facinating game to minimize the losses for everyone.
Unpaid dues to employees.
Unpaid MRO (s?)
Unpaid leasors

One doesn't need any expertise to see a huge amount of debt must be restructured. This is the great game. Demand too much and the cash leaves. But if any party doesn't assert their rights, they lose by default.

Jet might shrink a little more. They might fail.

I'm glad I do not have a stake. Some groups will loose huge amounts of money.

Lightsaber
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edealinfo
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:18 am

Lightsaber,
Why have you already reached the endgame conclusion? For that you will have to wait until mid Feb. i am leaning towards some sort of settlement. Goyal is friendly and influential with all political parties (hey, how can you not forget the free upgrade to business class, ha ha), and Mr Moody ain’t going to let Jet fall in an election cycle that’s just a few months ahead. You may be looking at the pure business aspect, but in India, politics trumps everything!
 
edealinfo
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:20 am

Binayak,
Thanks for the key pieces of info and good to know.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:51 am

TOI reports that Naresh Goyal is ready to step down from the board provided Etihad increases stake at the right price
https://timesofindia.indiatimes.com/bus ... 633378.cms
17April2019: RIP Jet Airways
 
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lightsaber
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 4:06 am

edealinfo wrote:
Lightsaber,
Why have you already reached the endgame conclusion? For that you will have to wait until mid Feb. i am leaning towards some sort of settlement. Goyal is friendly and influential with all political parties (hey, how can you not forget the free upgrade to business class, ha ha), and Mr Moody ain’t going to let Jet fall in an election cycle that’s just a few months ahead. You may be looking at the pure business aspect, but in India, politics trumps everything!

The end game lasts months.
Jet is no longer functional on a cash flow basis. While we could go well into or through February, we are now where any major setback (e.g., fuel at foreign destinations or involuntary repossession) could set a spiral.

This is still in play, not doubt about that. But Jet might be out on Indian hands. Too much money has gone unpaid. So while I can see Jet struggling alongfor a little while (say 3 more months), a major cash influx and debt relief is needed soon.

The decisions that matter will be made within 60 days. To me, that is the end game.

Jet needs cash. Soon.

Lightsaber
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Antarius
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 4:20 am

BawliBooch wrote:
There was once a bankrupt airline in Europe, not too long ago, which reinvented itself in a new avatar using the AOC of a subsidiary.

Any guesses which one?

These 11 aircraft on S2 register is just to keep the AOC alive! It could serve a similar purpose now. Naresh Goyal was clearly planning ahead!

Remember how Jet placed an order of 75+75 MAX planes in 2015 followed by another 75 plane order a few months later? I wonder if both the orders booked with Boeing were for the same AOC?

People underestimate Naresh Goyal.


I'm assuming you are referring to LX. If so, the clowns who ran SR into bankruptcy did not turn around and run LX. LX took over SR's assets and routes.

NG is the problem. He can't solve himself through a subsidiary.
19:SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX SYD CVG PHL MAD ORY CDG SLC SJU BQN MHT YYZ STS DOH BLR KTM MFM MEX MSY BWI BNA
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 7:51 am

Jet Airways' grounded 77W remains out of action at MAA
Image
Credit: @Mohan_Rngnathan
17April2019: RIP Jet Airways
 
devmapper
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 8:09 am

Antarius wrote:
NG is the problem. He can't solve himself through a subsidiary.

I think NG walked away from Tata, simply because they made it clear that they'd buy him out completely, and that he'd have no shares in 9W. His actions remind me of Dick Fuld of Lehman before the bankruptcy.

I hope he's not a vindictive man, taking his "ship" down with him because he'll not let anyone else have it. The S2 AoC probably wouldn't work, because any smart buyer would put in non-compete clauses. He'd have to wash his hands and walk away.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 8:14 am

devmapper wrote:
The S2 AoC probably wouldn't work, because any smart buyer would put in non-compete clauses. He'd have to wash his hands and walk away.

S2 AoC won't work because the AoC is owned by Jet Airways the airline and not Naresh Goyal the director.
17April2019: RIP Jet Airways
 
devmapper
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 8:16 am

unrave wrote:
devmapper wrote:
The S2 AoC probably wouldn't work, because any smart buyer would put in non-compete clauses. He'd have to wash his hands and walk away.

S2 AoC won't work because the AoC is owned by Jet Airways the airline and not Naresh Goyal the director.

Ah, I missed that bit.
 
blrsea
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 9:11 am

Looks like someone if paying media to push articles saying letting a large company Jet go down will be bad for NDA govt as it gives negative impression of economy. Many newspapers carrying simliar stories. Plus 9W's friends in congress have already started saying Jet going down shows economy in bad shape. I guess paying a few crores to media/cong for putting pressure on govt to get thousands of crores in loans is cheaper than putting in thousands of crores into the company itself by promoters! Hope govt doesn't take the bait, but one can never say in India, especially when elections are near!
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 9:24 am

blrsea wrote:
Looks like someone if paying media to push articles saying letting a large company Jet go down will be bad for NDA govt as it gives negative impression of economy. Many newspapers carrying simliar stories. Plus 9W's friends in congress have already started saying Jet going down shows economy in bad shape. I guess paying a few crores to media/cong for putting pressure on govt to get thousands of crores in loans is cheaper than putting in thousands of crores into the company itself by promoters! Hope govt doesn't take the bait, but one can never say in India, especially when elections are near!

The propaganda was started by Anurag Kotaky of BloombergQuint today
17April2019: RIP Jet Airways
 
VTORD
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 1:12 pm

unrave wrote:
blrsea wrote:
Looks like someone if paying media to push articles saying letting a large company Jet go down will be bad for NDA govt as it gives negative impression of economy. Many newspapers carrying simliar stories. Plus 9W's friends in congress have already started saying Jet going down shows economy in bad shape. I guess paying a few crores to media/cong for putting pressure on govt to get thousands of crores in loans is cheaper than putting in thousands of crores into the company itself by promoters! Hope govt doesn't take the bait, but one can never say in India, especially when elections are near!

The propaganda was started by Anurag Kotaky of BloombergQuint today


What's with all the negativity!? Look at the bright side guys, we finally have a hatchet job in reply to the first hatchet job!! :lol:
 
Exeiowa
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 2:22 pm

As to the "its still going this should be shut down" line.

They have run out of their own money, now they are running out of other peoples money so they have a few options for the next stage.

1) Convert debt to equity, large share dilution occurs, existing sharholders wiped out, their shares effectively worthless, and you are now owned by the bank. This is normally the model in the western countries for companies that survive this kind of debt death. But NG would lose effective control, Etihad lose their investment, unless there is some strange issue of additional shares, so in effect just eliminating private investment. But with all the known ownings that would have to be preserved under that model I don't think there is enough juice to squeeze if they tried that!

2) Find a rich benefactor, give a cash infusion, well they have done that a few times, at some point those investors might like a return.

3) Sell assets, I think they have done this already and there is not much left, they have mostly leased aircraft, so can't sell them either.

4) Restructure debt and offer pennies on the dollar to lenders, something is better than nothing etc, but you still have to have something to give. Plus dramatic costs savings, reduced salaries etc, But are they in a position to impose pay cuts on pilots for example or would they just walk and go to a competitor due to demand for their skills?

5) Liquidation, it seems that what saves them from this option might be they own very little worth liquidating to be worth the bother.

It seems to me that they should have taken their medicine early, but stubborn refusal has taken them down this path, aided by sympathetic oversight. If you have this much trouble running a profitable airline during expanding economic good times, you are not going to survive any down turn, especially as this is a global business.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 2:38 pm

Exeiowa wrote:

4) Restructure debt and offer pennies on the dollar to lenders, something is better than nothing etc, but you still have to have something to give. Plus dramatic costs savings, reduced salaries etc, But are they in a position to impose pay cuts on pilots for example or would they just walk and go to a competitor due to demand for their skills?



They aren't fully paying their employees anyways. That is effectively a pay cut. Pay cut negotiations are notoriously difficult in India so I don't know how feasible the plan is. I think the resolution if it happens will be a mix of everything: some equity infusion, some debt converted to equity, some network restructuring
17April2019: RIP Jet Airways
 
blrsea
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 2:44 pm

VTORD wrote:
unrave wrote:
blrsea wrote:
Looks like someone if paying media to push articles saying letting a large company Jet go down will be bad for NDA govt as it gives negative impression of economy. Many newspapers carrying simliar stories. Plus 9W's friends in congress have already started saying Jet going down shows economy in bad shape. I guess paying a few crores to media/cong for putting pressure on govt to get thousands of crores in loans is cheaper than putting in thousands of crores into the company itself by promoters! Hope govt doesn't take the bait, but one can never say in India, especially when elections are near!

The propaganda was started by Anurag Kotaky of BloombergQuint today


What's with all the negativity!? Look at the bright side guys, we finally have a hatchet job in reply to the first hatchet job!! :lol:


No negativity, just don't want more money thrown into company with same management expecting different results. As it is, banks have to take a haircut on their loans, no doubt about it. Only the quantum needs to be defined. I would personally be very happy if Jet survives. Not only will it save jobs, but its also the only FSC in India which has potential to really expand internationally and take the fight to EU/ME carriers. It needs some capable management and creative thinking to do that.

We have had enough with sinking thousands of crores into bottomless pit that is AI , and lost thousands of crores in Kingfisher. No need to repeat same with 9W. Let promoters put in their fair share and let a proper management be put in place to steer the ship.
 
dtw2hyd
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:19 pm

No one would care if a private carrier closes shop. But in India PSBs involvement makes it a public issue. It appears Indians want someone to take on the debt so their deposits are safe.

During US3 chapter 11, $Billions of airline debt (means $$Billions of assets of somebody else) was wiped out. No drama.

End the restriction on ECB and let airlines (based on their own financial health) borrow from the open global market.

Why Indian banks collect 15% interest and when things go south write off/convert debt. Collect reasonable rate so both business and banks can be healthy
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:23 pm

Every INDIAN company borrows at the same rate. Why should airlines deserve special treatment?
Every INDIAN company is subjected to ECB controls. Why should airlines deserve special treatment?
17April2019: RIP Jet Airways
 
georgiabill
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:32 pm

If EY and 9W can not come to a deal favorable to all parties involved is there any chance the Tata might make another bid? If not are there any other Indian companies or business people who might be in a position to make a deal to save 9W?
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Jan 22, 2019 3:44 pm

TATAs want NG out and Lala ji shows no sign of stepping down
17April2019: RIP Jet Airways

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