I have no idea why people think this is some "masterstroke" by Naresh Goyal. It seems like a last ditch hail mary to save himself. He is pushing the company, the employees, the other stakeholders and all the fliers who have tickets under the bus.
What can be the possible outcomes? Etihad will never work with NG even if they save Jet, and banks will be wary of him as well. Every other investor looking at this will be wary of him as well.
I think Goyal's greed has done huge damage to the value of Jet. Whatever happens, Jet will be less because of him. The company needs a major reorganization.
The banks hope for a funding next week. What matters is the new investment. Either their
terms are good enough, or they won't invest. We'll find out within a few weeks.
So, you are suggesting he should sit back and accept the "perpetuity" clause that prohibits him from investing beyond 22% after he invests $750 crore while Etihad which invests only an identical amount gets to impose those terms on him? How can that be fair?
Are you suggesting EY should risk him taking over again? Goyal can accept or reject. Same with EY. But isn't EY expected to increase their investment to 1,800? Isn't a new investor expected to invest 1,800 crore too?
Fair has nothing to do with the deal. If EY won't accept a deal:
1. Find another investor (tried and failed before).
2. Invest more of Goyal's own money.
3. Accept EY's offer
If no deal is reached, Goyal ends up with the Kingfisher 2 and possible court action.
EY should actually demand more as the delays have reduced the brand value of Jet.
Our discussion won't matter soon. Soon Jet cannot be saved.
So yes, by managing the company into default, Goyal has a weak negotiating position. If Jet fails, it will be his fault. Couldn't he come up with the entire required half billion USD? Why isn't he? He should be reducing EY's share!
As they say in business, put up or shut up.
We discuss, but nothing changes. Very soon that means Jet shuts down. The airline will not make the election. This is big business at it's best and worst. EY's BoD has one concern, the business case (projected ROI). If the needed targets are not met, oh well. They are now numb to sunk costs.
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