After showing initial enthusiasm, Tata Group has now reportedly decided to go slow with Jet Airways deal. According to a report in the Times of India, Tata Sons chairman N Chandrasekaran decided to take steps back after some members in the board show scepticism over the Jet Airways sale, resulted in the inconclusive board meet.
The report further stated that Tata Group's board would again meet in the third week of December to discuss on details over the taking over of the cash-strapped airline.
"You can’t rush into a complex situation that could cost the group up to $2 billion without doing serious homework,” the newspaper quoted a person close to the development saying.
Last week, the board members of Mumbai-based Tata Sons discussed the possibility of taking over the crisis-ridden Jet Airways. However, the company is yet to make a concrete proposal in this regard. Even as the discussions continued, the speculation sent the carrier's stock soaring to end the trading session at 8.7% higher. The stock has risen by around 40% in the past five days.
"Over the last few days, there has been growing speculation in the print and electronic media about Tata's interest in Jet Airways. We would like to clarify that any such discussions have been preliminary and no proposal has been made," said Tata Sons in a statement later. Amit Agarwal, CFO of Jet Airways, had admitted on Monday that the airline is in talks with multiple interested parties for fund infusion and selling off stakes in its loyalty programme. Earlier, the airline management had termed the reports over talks with Tata Sons as "speculative".
Tata Sons already owns full-service carrier (FCC) Vistara in partnership with Singapore Airlines and AirAsia in a JV with Malaysia-based AirAsia Group Berhad. It is believed that the salt-to-software conglomerate now wants to take advantage of Jet Airways' wide international network for giving wings to Vistara's dreams of flying internationally. However, the contention has been over the issue of Tata Sons wanting complete control over the management, which the promoter Naresh Goyal is at present said to be hesitant, the sources claim. Promoter Naresh Goyal along with his family owns 51 % stake while Gulf-based Etihad Airways owns another 24 % in the airline.