anshabhi wrote:

"]

And if 9W goes bust, won't Tata (through Vistara) just get them for free?

The airline that acquires the most new aircraft within a short period of time to gobble up the vacated New Delhi and Mumbai slots is the one that is King. Does Vistara have the capacity, will, and plan to pull something off like this? So far, from press reports, it seems only SpiceJet and Indigo have had the foresight to get cracking on acquiring planes quickly.

Since August 2018, Naresh Goyal's biggest miscalculation was that Jet was so valuable to Etihad (for the connecting traffic and increased capacity to India on code share flights), that it was inevitable they would not pull the plug on Jet. Had he been aware right from the outset that there was a 50% / 50%, or better chance that they would walk, he wouldn't have tried to squeeze every little ounce out of possible deal to revive Jet.

So, his major mistakes so far:
1. Buying Air Sahara
2. Buying too many large bodied aircraft
3. Not properly handicapping Etihad's odds of pulling the plug
4. Not having adequate political weight (like say, the elder Ambani) to carry the day.

His major successes were:
1. Super service on Jet from inception until about 2010
2. Conjuring the 5/20 rule to protect Jet against competitors
3. Getting Etihad to overpay and rescue Jet in 2013
4. Influence in India's Civil Aviation Ministry
5. Being in every political party's camp (until recently when the Congress suddenly decided to turn against him)
6. Making him a household name for both his success (and failures)
7. Partnership with Delta/Air France/KLM/Virgin

edealinfo wrote:

anshabhi wrote:

"]

And if 9W goes bust, won't Tata (through Vistara) just get them for free?

The airline that acquires the most new aircraft within a short period of time to gobble up the vacated New Delhi and Mumbai slots is the one that is King. Does Vistara have the capacity, will, and plan to pull something off like this? So far, from press reports, it seems only SpiceJet and Indigo have had the foresight to get cracking on acquiring planes quickly.

Neither do I think Tata can or are willing to suddenly expand from 25 NBs to 100+ aircraft including WBs. Vistara is still losing some 500 crore annually

blrsea wrote:

anshabhi wrote:

edealinfo wrote:

KUDOS TO BUSINESS-STANDARD FOR BEING THE FIRST NEWSPAPER TO BREAK THE STORY

https://www.business-standard.com/artic ... 838_1.html

that sounded like the typical self ego boosting declaration on every Indian TV channel ever

Is there not a massive lobby going on already to get 9W's slots released? Will banks be really able to counter SG's influence over the ministry?
This time they also have the laws on their side i.e. slots must be vacated if they are unused for a long time.

And if 9W goes bust, won't Tata (through Vistara) just get them for free?

There is many a slip between the cup and the lip! There have been lots of resolution plans in many newspapers including BS, one just needs to read this thread for last 2-3 months. Lets see what finally happens

Yea... Jet had certain rescue so far, in this thread, from Tata, Etihad, QR, major investment from the banks.

1,500 crore is about $220 million usd. For the December 2018 quarter, they lost 587 crore.
https://www.moneycontrol.com/financials ... sults/JA01

Now they have all the overhead and very few flights. The most profitable narrowbody international flights have been cut. Not ideal, but required to prevent aircraft repossession.

9W needs money for salaries, aircraft leases, fuel, MROs (maintenance), and all those pesky vendors who want to be paid.

1,500 is a sneeze. Seriously, the first 6,000 crore poured into Jet goes to past due debt. Probably more. Is there an estimate of vendor dues owed? Salary/dues owed to employees? Unpaid fuel bills? I would be pleasantly shocked if they were current on the Indian fuel.

Hope is good until you make a bad decision based on it. In general, optimism wins out in the business world, but not during the extinction thrash.

anshabhi wrote:

edealinfo wrote:

anshabhi wrote:

"]

And if 9W goes bust, won't Tata (through Vistara) just get them for free?

The airline that acquires the most new aircraft within a short period of time to gobble up the vacated New Delhi and Mumbai slots is the one that is King. Does Vistara have the capacity, will, and plan to pull something off like this? So far, from press reports, it seems only SpiceJet and Indigo have had the foresight to get cracking on acquiring planes quickly.

Neither do I think Tata can or are willing to suddenly expand from 25 NBs to 100+ aircraft including WBs. Vistara is still losing some 500 crore annually

Vistara might do better with scale. The question is, how to cut Jet's costs *quickly*? Tata's board was wise to veto the earlier offer. I'm not so sure they aren't better off letting Jet fade to black.

Lightsaber

lightsaber wrote:

Vistara might do better with scale. The question is, how to cut Jet's costs *quickly*? Tata's board was wise to veto the earlier offer. I'm not so sure they aren't better off letting Jet fade to black.

Lightsaber

Why does Tata need to acquire Jet? Can't they not lease Airbus A320 planes from Air Asia Headquarters in Malaysia, which seems to have a gazillion of these planes. I think they even have their own Aircraft Leasing Company. Also, they could reach out to their SQ partners to ascertain if SQ's leasing department contacts can quickly line up some A320s from the leasing market. Why take Jet (and its baggage --- pun intended), when it can have clean-start (my word) planes?

edealinfo wrote:

Why does Tata need to acquire Jet? Can't they not lease Airbus A320 planes from Air Asia Headquarters in Malaysia, which seems to have a gazillion of these planes. I think they even have their own Aircraft Leasing Company. Also, they could reach out to their SQ partners to ascertain if SQ's leasing department contacts can quickly line up some A320s from the leasing market. Why take Jet (and its baggage --- pun intended), when it can have clean-start (my word) planes?

Nobody is investing a single rupee in Jet in its current state

unrave wrote:

edealinfo wrote:

Why does Tata need to acquire Jet? Can't they not lease Airbus A320 planes from Air Asia Headquarters in Malaysia, which seems to have a gazillion of these planes. I think they even have their own Aircraft Leasing Company. Also, they could reach out to their SQ partners to ascertain if SQ's leasing department contacts can quickly line up some A320s from the leasing market. Why take Jet (and its baggage --- pun intended), when it can have clean-start (my word) planes?

Nobody is investing a single rupee in Jet in its current state

I fear this is exactly what it comes to. Massive negative worth does this kind of thing to companies in trouble -- like black holes, they can swallow any amount of money without any noticeable change (for the better, that is).

Once it's that bad, unless you can auction off healthy parts quickly and expensively, they become cheaper and less healthy.

lightsaber wrote:

blrsea wrote:

anshabhi wrote:

that sounded like the typical self ego boosting declaration on every Indian TV channel ever

Is there not a massive lobby going on already to get 9W's slots released? Will banks be really able to counter SG's influence over the ministry?
This time they also have the laws on their side i.e. slots must be vacated if they are unused for a long time.

And if 9W goes bust, won't Tata (through Vistara) just get them for free?

There is many a slip between the cup and the lip! There have been lots of resolution plans in many newspapers including BS, one just needs to read this thread for last 2-3 months. Lets see what finally happens

Yea... Jet had certain rescue so far, in this thread, from Tata, Etihad, QR, major investment from the banks.

1,500 crore is about $220 million usd. For the December 2018 quarter, they lost 587 crore.
https://www.moneycontrol.com/financials ... sults/JA01

Now they have all the overhead and very few flights. The most profitable narrowbody international flights have been cut. Not ideal, but required to prevent aircraft repossession.

9W needs money for salaries, aircraft leases, fuel, MROs (maintenance), and all those pesky vendors who want to be paid.

1,500 is a sneeze. Seriously, the first 6,000 crore poured into Jet goes to past due debt. Probably more. Is there an estimate of vendor dues owed? Salary/dues owed to employees? Unpaid fuel bills? I would be pleasantly shocked if they were current on the Indian fuel.

Hope is good until you make a bad decision based on it. In general, optimism wins out in the business world, but not during the extinction thrash.

anshabhi wrote:

edealinfo wrote:

The airline that acquires the most new aircraft within a short period of time to gobble up the vacated New Delhi and Mumbai slots is the one that is King. Does Vistara have the capacity, will, and plan to pull something off like this? So far, from press reports, it seems only SpiceJet and Indigo have had the foresight to get cracking on acquiring planes quickly.

Neither do I think Tata can or are willing to suddenly expand from 25 NBs to 100+ aircraft including WBs. Vistara is still losing some 500 crore annually

Vistara might do better with scale. The question is, how to cut Jet's costs *quickly*? Tata's board was wise to veto the earlier offer. I'm not so sure they aren't better off letting Jet fade to black.

Lightsaber

So in Q4-2018 they lost US$85 million alone and yet MAA-CDG is being operated normally !

I don't understand who are the people who still have hope from 9W... It's stock is still at Rs 225.
I expected it to become a penny stock by now

anshabhi wrote:

I don't understand who are the people who still have hope from 9W... It's stock is still at Rs 225.
I expected it to become a penny stock by now

Why aren’t short sellers of the stock active? This could be a massive opportunity for them as the chances of the stock falling and much much more than the stock increasing.

Apparently Business Line newspaper has reported that Jet had a Board meeting in London on Sunday but they haven’t got the scoop as yet on what transpired.

When airports like BOM are restricted for new flights, slots have value and airlines which were there earlier do get to keep them or use them as a tradable asset.

Surely the slots for Jet at BOM has some value. May Jet should have traded those slots with Indigo for some cash or some other arrangement on the side. At this time it looks like Jet will last about a month or so, no more unless something dramatic happens. For Jet to last longer, they need to keep the BOM flights operating which is the only profitable asset they have and also pay the Dec and Jan salaries to the pilots and other employees so that they can look forward to something positive.

Government should intervene and regulate advance booking by Jet Airways
Jet cancellation fees are one of the highest and people find it difficult to cancel their scheduled flights. Refunds will be equally challenging.

https://timesofindia.indiatimes.com/bus ... 542749.cms

hohd wrote:

When airports like BOM are restricted for new flights, slots have value and airlines which were there earlier do get to keep them or use them as a tradable asset.

Surely the slots for Jet at BOM has some value. May Jet should have traded those slots with Indigo for some cash or some other arrangement on the side. At this time it looks like Jet will last about a month or so, no more unless something dramatic happens. For Jet to last longer, they need to keep the BOM flights operating which is the only profitable asset they have and also pay the Dec and Jan salaries to the pilots and other employees so that they can look forward to something positive.

As discussed here earlier, slots in India aren't tradeable, hence selling them doesn't arise.

Looks like EY hasn't fully given up on Jet yet.

Deal or Exit? Etihad to take final call on Jet Airways on 31 March

The board of Etihad Airways PJSC will meet 31 March to take a final decision on whether the Abu Dhabi-based carrier should make a fresh investment in Jet Airways (India) Ltd or exit the ailing airline, two people directly aware of the development said.

Etihad’s chief executive, Tony Douglas, who met State Bank of India (SBI) chairman Rajnish Kumar in Mumbai on 18 March, has sought a term sheet from Indian lenders, which require them to buy Etihad’s 24% stake in Jet Airways if the UAE airline decides to sell. Alternatively, Etihad will make fresh investments in the Mumbai-based carrier only after the lenders agree to fulfil specific conditions.

“Etihad has laid down certain conditions, which includes removal of the Naresh Goyal group from the board altogether," one of the two people cited earlier said on condition of anonymity. The airline has also sought a guarantee from the lenders for offering more credit to Jet Airways after the equity infusion, the person added.
...

pushpakvimaan wrote:

Government should intervene and regulate advance booking by Jet Airways
Jet cancellation fees are one of the highest and people find it difficult to cancel their scheduled flights. Refunds will be equally challenging.

https://timesofindia.indiatimes.com/bus ... 542749.cms

That’s a guaranteed way of pulling the rug under Jet’s feet. That’s like asking Jet to sell nails so others can use it on the coffin. Your suggestion makes no sense to a dying airline that’s trying its best to survive. If a customer wants a ticket with lower cancellation fees , he or she always has the option of buying tickets on another airline. Why does this person still want to book tickets on Jet knowing the risk it carries? why? Why?

And one other story. I guess its like six blind men and elephant, every "source" the journos talk to give their own interpretation of event!

Lenders may put entire Jet on block

Jet Airways’ lenders may this week invite expressions of interest (EoI) from investors looking to acquire the ailing airline.

They are planning to put the entire company on the block after asking the current promoters led by Naresh Goyal to step down.

...A source close to the lenders said one of the options being discussed is to have a new board to oversee the stake sale to new investors. However, BusinessLine could not independently verify if the meeting took place and the outcome thereof.

BusinessLine had earlier reported that the Tata Group could emerge as a contender to acquire the airline. Sources in the banking industry had said that talks with the Tatas could be restarted soon.
...

edealinfo wrote:

Why does this person still want to book tickets on Jet knowing the risk it carries? why? Why?

Because not every flier in India is as smugly enlightened about Jet's state of affairs as the average Anet poster. Because it is the job of the industry regulator to ensure that the industry player doesn't end up short changing the customer.

Economic Times reporting same as Business Line. Will Goyal really step down today?

Naresh Goyal, his wife Anita Goyal to exit Jet Airways today

Jet AirwaysNSE 3.43 % founder and principal promoters Naresh Goyal, and his wife Anita Goyal will today step down from the board and leave the airline they founded nearly 25 years ago, ET Now learns exclusively from sources. The formal announcement on the Goyals exit is expected later today.

Naresh Goyal is in London, and may address all 23,000 employees of Jet from there.

The current CEO Vinay Dube is expected to stay on and steer Jet out of the current crisis.
...

blrsea wrote:

Looks like EY hasn't fully given up on Jet yet.

Deal or Exit? Etihad to take final call on Jet Airways on 31 March

The board of Etihad Airways PJSC will meet 31 March to take a final decision on whether the Abu Dhabi-based carrier should make a fresh investment in Jet Airways (India) Ltd or exit the ailing airline, two people directly aware of the development said.

Etihad’s chief executive, Tony Douglas, who met State Bank of India (SBI) chairman Rajnish Kumar in Mumbai on 18 March, has sought a term sheet from Indian lenders, which require them to buy Etihad’s 24% stake in Jet Airways if the UAE airline decides to sell. Alternatively, Etihad will make fresh investments in the Mumbai-based carrier only after the lenders agree to fulfil specific conditions.

“Etihad has laid down certain conditions, which includes removal of the Naresh Goyal group from the board altogether," one of the two people cited earlier said on condition of anonymity. The airline has also sought a guarantee from the lenders for offering more credit to Jet Airways after the equity infusion, the person added.
...

The soap opera continues! thanks for sharing.

Among Indian newspapers, livemint.com and Business Standard have been in the forefront of reporting the latest happenings at Jet whereas, the business stalwarts, namely the economic Times and financial express, have lagged considerably.

Business Standard has a fresh story on “why Etihad won’t invest in deb-laden Jet anymore” but the story is behind a paywall.

Anyway, all the latest stories seem to suggest that SBI will take control and throw a lifeline which means in reality that Modi has rescued Jet, which probably only happened because of the elections. So, Jet’s survival is truly a divine intervention... if you believe or God, or coincidence or pure luck....if you are an aetheist. If you are an employee of Jet, you just hit the lottery!

Looking forward to g0yal’s emotional resignation letter in which he will describe his “supreme sacrifice”.

So, not only will he not get to be chairman emeritus but Etihad doesn’t even want his son to be on the Board. he must have pissed them so much that they wanted the Goyal family out, lock, stock, and barrel.

Also, I am surprised that SBI warmed up to Etihad. maybe they liked the directness and no BS approach of a the Etihad CEO and the fact that he came to Mumbai to meet SBI to make his case in person.

edealinfo wrote:

Also, I am surprised that SBI warmed up to Etihad. maybe they liked the directness and no BS approach of a the Etihad CEO and the fact that he came to Mumbai to meet SBI to make his case in person.

Etihad has the competency and is willing to put some cash into Jet under the right terms.

There is a huge deficit. This is a reoganizational bankruptcy without clear rules.

Lightsaber

Breaking news from Business Standard

“The lenders to Jet Airways worked through the weekend to finalise the details of a new resolution plan to rescue the failing airline. That includes an emergency funding of at least Rs 1,500 crore. The plan prepared by the lenders’ consortium, led by the State Bank of India, will be discussed at the Jet board meeting scheduled for Monday, according to sources in the know. It is learnt that a change in the Jet management, including a new board chairman, could be executed immediately after the board approvals. Investment banking firm Arpwood Capital is helping the lenders’.

Users please stop posting speculative news articles. There are obviously tons of articles generated by news agencies every day, and their main purpose is for clicks and views. So often times they are not actual happenings at the said company, and rather what they think is happening. And nobody cares what they think. We all can think too and have our own assumptions of the situation.
So often I see "why EY has given up and will exit" and "why EY has not given given up" preceding each other in posts.
So please post actual developments or happenings based on facts rather than articles that are the views and perspective of individual agencies and their journos. They generally go as:
Why EY might..
Why EY might not..
Why Jet might..
Why Jet might not..

Try not to dilute the forum with such articles and maintain some discipline in posting.

₹1500 crs ($220 million) should buy time for a few weeks, say until the middle of the election. The government may force another bailout to prevent the inevitable at that point.

unrave wrote:

edealinfo wrote:

Why does this person still want to book tickets on Jet knowing the risk it carries? why? Why?

Because not every flier in India is as smugly enlightened about Jet's state of affairs as the average Anet poster. Because it is the job of the industry regulator to ensure that the industry player doesn't end up short changing the customer.

That is normally the role of travel insurance. What some countries do is have a mandatory travel insurance policy added to price of tickets/ tours (i.e ABTI for UK tour operators) to have a rescue fund in such cases

Another sign that a turn-around is being executed with all hands on board. Note the date of commencement of code-shares.

Air France expands Jet Airways domestic India codeshare from May 2019

Air France from May 2019 plans to expand codeshare partnership with Jet Airways, covering additional domestic routes operated by the latter. Planned codeshare routes from 01MAY19 as follows.
AIRFRANCE operated by Jet Airways
Bangalore – Pune
Bangalore – Vadodara
Chennai – Pune
Delhi – Bhopal
Delhi – Chandigarh
Delhi – Indore
Delhi – Jaipur
Delhi – Kochi
Delhi – Lucknow
Delhi – Nagpur
Delhi – Patna
Delhi – Pune
Mumbai – Amritsar
Mumbai – Bhuj
Mumbai – Chandigarh
Mumbai – Coimbatore
Mumbai – Indore
Mumbai – Jaipur
Mumbai – Lucknow
Mumbai – Mangalore
Mumbai – Nagpur
Mumbai – Patna
Mumbai – Pune
Mumbai – Thiruvananthapuram
Mumbai – Vadodara

https://www.routesonline.com/news/38/ai ... -may-2019/

But there is no risk for AF. If 9W has the flights scheduled/ in the system. AF can sell them. If the flight is cancelled, it is for the operating carrier (9W) to find alternative. And AF will only transfer the sales money to 9W after the etkt coupon is 'lifted' by 9W (i.e. they get paid after the 9W flight, not in advance)

If 9W does go out of business, AF still has the money & can refund the passenger/ find alternative

How Jet Airways landed in a soup
Profits are as thin as a boarding pass. Skyrocketing — forgive the pun — losses are common. This has been pretty much the story since the aviation sector was liberalised in India. The history of Indian aviation is littered with airlines that have gone bust. NEPC, Damania, East West Airlines, Air Costa, Paramount, Air Pegasus, Air Carnival are just some of the examples of airlines that failed. There is a bigger list of airlines that did not take off: Fly Easy, Indus Air, Volk, Archana Airways etc. Some of these even had their aircraft ready but couldn’t see the light of the day in India.


Against this bleak backdrop, what is happening with Jet Airways needs a deeper understanding of how airlines reach a situation they eventually succumb to. The seeds of the Jet Airways issue were sown long ago.

The airline has consistently failed to clock operational profits (income from operations minus expenditure of operations). The last time the airline made an operational profit was in 2015. The net profit which the airline has recorded in the last few years has been from the money it got for the sale of land at Bandra Kurla Complex or the money it received in tranches for the partial sale of its loyalty program Jet privilege private limited (JPPL).

Naresh and Anita Goyal should be resigning from Jet today, recovery is ready to roll, the only question if they waited too long...next couple of months should be interesting!

Why Banks are trying to inject money into Jet / bail them out? 9W is a private company....with all due respect to their employees, company's failure is like any other business going bust....where does this stop? and why special treatment to Jet/NG? all those people paying taxes, their money is being used to salvage egoistic NG and his failed business model? very strange imho.

theaviator380 wrote:

Why Banks are trying to inject money into Jet / bail them out? 9W is a private company....with all due respect to their employees, company's failure is like any other business going bust....where does this stop? and why special treatment to Jet/NG? all those people paying taxes, their money is being used to salvage egoistic NG and his failed business model? very strange imho.

It's being saved for the employees really and consumers to some extent.
Also by that logic, even AI having debts 5 times more than 9W (and also KF) , with annual cash injections happening in thousands of crores each year, should be let gone and not saved using tax payer money. Why should tax payer bear the brunt of govt's inefficient and failed business model?
The govt. might be having some guilt that better run airlines than their own AI with a fraction of the debt are going bust and AI is being saved.
I'm surprised there is no public protest (or a.net protest lol) over AI being kept alive in such a manner.

BBC reporting Goyals have resigned

Jet Airways founder Naresh Goyal, wife Anita resign from boa ..

Read more at:
http://timesofindia.indiatimes.com/arti ... aign=cppst

Just to make it clear, Naresh and Anita Goyal have only resigned from the Board, they still own part of Jet. Banks and the potential new buyer will want them completely out. Naresh Goyal hopes to ride it out and come back to make a bid for power if Jet survive. This drama is just starting, get the popcorns.

Goyal resignation and reduced holdings, bank-led restructuring with new funds but not bankruptcy. Reuters:

NEW DELHI (Reuters) - Jet Airways Chairman Naresh Goyal will step down from the board and reduce his stake in the cash-strapped Indian carrier, the company said on Monday as it closes in on a rescue deal led by state-run banks.

The banks, led by State Bank of India (SBI), will convert their debt into equity and take a controlling stake in the airline for a token sum of 1 rupee ($0.0145), Jet said in a statement to the stock exchanges after its board met earlier on Monday.

The banks will also give the airline a fresh loan of 15 billion rupees ($217.71 million) to meet payments and restore normal operations and the lenders will form an interim management committee to manage the airline, Jet said.

https://www.reuters.com/article/us-jet- ... SKCN1R60Y7

9W stock 15% up today after NG resigns. Is the market just too bullish or is there actually some way out?

Short story so far:
Mr and Mrs NG as well as Etihad nominee have resigned from the board
Banks have taken up 50% stake in the airline at Re 1, while the shareholding of everyone has been reduced by half
An interim committee will run the airline
There will be an emergency funding of Rs 1500 crore from banks
The lenders will now hunt for new investors to run the airline

unrave wrote:

Short story so far:
Mr and Mrs NG as well as Etihad nominee have resigned from the board
Banks have taken up 50% stake in the airline at Re 1, while the shareholding of everyone has been reduced by half
An interim committee will run the airline
There will be an emergency funding of Rs 1500 crore from banks
The lenders will now hunt for new investors to run the airline

1500 crore is a short term loan (bond). Another burden on a new owner, if any.

I think govt is only doing this to evade "didn't do anything" allegation in future, while the banks are fully aware they are trying to revive a blackhole.

And the amount is a small fraction of the airline's dues.

anshabhi wrote:

unrave wrote:

Short story so far:
Mr and Mrs NG as well as Etihad nominee have resigned from the board
Banks have taken up 50% stake in the airline at Re 1, while the shareholding of everyone has been reduced by half
An interim committee will run the airline
There will be an emergency funding of Rs 1500 crore from banks
The lenders will now hunt for new investors to run the airline

1500 crore is a short term loan (bond). Another burden on a new owner, if any.

I think govt is only doing this to evade "didn't do anything" allegation in future, while the banks are fully aware they are trying to revive a blackhole.

The goal is to bring the operations to normal. They are still negotiating with EY and hence the piecemeal approach. I think it is pretty obvious that Jet is being saved. This is not a stunt (although it is foolish drama). Remember, if the GOI ends up selling their stake in 9W, they can restructure any debt as part of the sale. That is how sales like this work. It is never take it or leave it when it comes to a bank sale. The bank has every incentive in ensuring the assets don't go to $0. So they will take haircuts on their debt. Super normal. Only on anet do people think Jet will be sold with all its baggage and the new owner will have no hope to service the debt. That is never happening.

On EY coming back to negotiate, I don't think EY wants Jet to be controlled by another airline. This whole process is not normal which tells me there is a lot going on behind the scenes. This has NEVER been about EY's ROI and a normal business analysis. I don't know what more evidence people need. As much as I want EY out of 9W, I predict the GOI will eventually cave to a reasonable EY offer. The UAE and Indian govt have much bigger economic connections to sour it over Jet. if 9W's money was from private banks, all bets are off. But public sector banks are basically an extension on the government just as EY is basically the AUH govt.

If you look back - this has been an almost year process of Goyal saying the sky is falling. This is starting to look like it was planned to get the concessions. As others have said, how could this have gone on for so long. The fact that Jet basically shut down through it all, is the shocking part. I meant WTF. Talk about playing chicken.

avier wrote:

Users please stop posting speculative news articles. There are obviously tons of articles generated by news agencies every day, and their main purpose is for clicks and views. So often times they are not actual happenings at the said company, and rather what they think is happening. And nobody cares what they think. We all can think too and have our own assumptions of the situation.
So often I see "why EY has given up and will exit" and "why EY has not given given up" preceding each other in posts.
So please post actual developments or happenings based on facts rather than articles that are the views and perspective of individual agencies and their journos. They generally go as:
Why EY might..
Why EY might not..
Why Jet might..
Why Jet might not..

Try not to dilute the forum with such articles and maintain some discipline in posting.

I disagree 100 percent. First, why should we have waited for fact — formal public announcement of the Goyals resigning, of the banks pumping in Rs 1600 crore — when those on this forum already knew that would be the case well in advance based on the chatter among various news articles. Those, what you deem as speculative articles, provided the insight for us. Second, people come to these forums to provide and receive proactive/prospective thoughts not retroactive/post fact stuff.

Separately for others on this forum. Etihad Board is meeting on March 31 to decide whether they should exit Jet completely, retain their lowered stake post dilution, or invest to maintain their stake at 24.9 percent. what position do you think they will take? Lightsaber. Particularly, your thoughts? My hunch is that because Etihad dropped the number of their directors in the Board from 2 to 1, it is an indication that they probably won’t invest anything more. Even with a reduced stake they still have some upside potential from their stake in Jet priveledge.

Note that the goyals are not precluded from increasing their stake in future. The could probably claw back to 25 percent so they can block special resolutions making this sago very interesting

Since the banks are getting 50.1 percent stake for Rs 2,000 crore at Re 1 per share, wouldn’t they make an extra Rs 2,000 crosse if they sold those shares for Rs 2 and a gazillion more if they sold it for Rs 150 per share or Rs 230 per share. something just doesn’t seem to make sense with banks acquiring shares for Rs 1,

edealinfo wrote:

Note that the goyals are not precluded from increasing their stake in future. The could probably claw back to 25 percent so they can block special resolutions making this sago very interesting

And where is the moolah to do this?

edealinfo wrote:

Since the banks are getting 50.1 percent stake for Rs 2,000 crore at Re 1 per share, wouldn’t they make an extra Rs 2,000 crosse if they sold those shares for Rs 2 and a gazillion more if they sold it for Rs 150 per share or Rs 230 per share. something just doesn’t seem to make sense with banks acquiring shares for Rs 1,

No, banks are getting 50.1% at Re 1. The funding is debt.

CaliguyNYC wrote:

The goal is to bring the operations to normal. They are still negotiating with EY and hence the piecemeal approach. I think it is pretty obvious that Jet is being saved. This is not a stunt (although it is foolish drama). Remember, if the GOI ends up selling their stake in 9W, they can restructure any debt as part of the sale. That is how sales like this work. It is never take it or leave it when it comes to a bank sale. The bank has every incentive in ensuring the assets don't go to $0. So they will take haircuts on their debt. Super normal. Only on anet do people think Jet will be sold with all its baggage and the new owner will have no hope to service the debt. That is never happening.

There are thousands of companies waiting in similar state for resolution. NCLAT only deals with that.
Companies find new takers only even they have excellent assets worth bidding for. 9W has no such asset and aviation in India is well proven as a great cash burner.

edealinfo wrote:

Since the banks are getting 50.1 percent stake for Rs 2,000 crore at Re 1 per share, wouldn’t they make an extra Rs 2,000 crosse if they sold those shares for Rs 2 and a gazillion more if they sold it for Rs 150 per share or Rs 230 per share. something just doesn’t seem to make sense with banks acquiring shares for Rs 1,

It's a pretty common practice to sell companies with negative networth at Rs 1. Ajay Singh also got for SG for that price in 2014

anshabhi wrote:

It's a pretty common practice to sell companies with negative networth at Rs 1. Ajay Singh also got for SG for that price in 2014

so, why can’t the banks sell their Rs 1 per share for Rs 5 per share (versus the Rs 230 plus market price) get 10,000 crore for the 2000 crore invested and call it a day? something just doesn’t make sense on banks acquiring for Rs 1 when the market price is over 230 times higher.

anshabhi wrote:

CaliguyNYC wrote:

The goal is to bring the operations to normal. They are still negotiating with EY and hence the piecemeal approach. I think it is pretty obvious that Jet is being saved. This is not a stunt (although it is foolish drama). Remember, if the GOI ends up selling their stake in 9W, they can restructure any debt as part of the sale. That is how sales like this work. It is never take it or leave it when it comes to a bank sale. The bank has every incentive in ensuring the assets don't go to $0. So they will take haircuts on their debt. Super normal. Only on anet do people think Jet will be sold with all its baggage and the new owner will have no hope to service the debt. That is never happening.

There are thousands of companies waiting in similar state for resolution. NCLAT only deals with that.
Companies find new takers only even they have excellent assets worth bidding for. 9W has no such asset and aviation in India is well proven as a great cash burner.

edealinfo wrote:

Since the banks are getting 50.1 percent stake for Rs 2,000 crore at Re 1 per share, wouldn’t they make an extra Rs 2,000 crosse if they sold those shares for Rs 2 and a gazillion more if they sold it for Rs 150 per share or Rs 230 per share. something just doesn’t seem to make sense with banks acquiring shares for Rs 1,

It's a pretty common practice to sell companies with negative networth at Rs 1. Ajay Singh also got for SG for that price in 2014

Don't know how you feel 9W has no value (btw the stock market totally disagrees with you). Here is 9W's value - real assets like owned airplanes, real estate, equipment + slots + infrastructure they have built - meaning trained employees, systems etc + established routes (meaning Vistara could say to develop Jet's network, it would cost them $500M - well then Jet's network is worth $500M to Vistara even if it loses money. Now once you add this up, it could be less than accumulated debt (but it looks like the banks are converting their debt to equity so shouldn't be a problem). Would the banks probably lose money on a sale, sure. But they will probably earn more than if they let 9W go belly up. Also they will retain some stake in Jet post sale. Those shares could go up later as well. A great example of what will happen here is the US goat's intervention (read bail out for stock) of the auto companies and banks during the financial crisis. In the end the UG govt made money. Not saying the GOI will 100% come out a head. That is just the path they are heading down.

Always interesting to read 2 news articles and all the interpretations of them.

There are ,however,2 items which appear to have fallen off the radar.

First,one of the regulators ( ?SEBI ) changed their ruling so that only financial institutions could take a stake of >25% in a company without making an open offer to all shareholders. To avoid this ball and chain, the banks will need to find 2 new investors to avoid them having to do this. If the banks sell their holding to, e g Tata, then I have little doubt that Etihad will commence legal action to enforce the purchase of their shares, if only as a negotiating ploy.

More interesting was the announcement some weeks ago that 9W had defaulted on an interest payment to HSBC-Abu Dhabi. Although the payment is guaranteed by EY, one has to wonder where legal jurisdiction lies. As the announcement appeared to include HSBC - no Abu Dhabi - it could lie in India, Abu Dhabi or England. If either of the latter two, and EY chose to enforce their rights ,it could become very messy. 9W flying to AUH or LHR/MAN could become problematic.