After disrupting the telecom sector in recent times, Mukesh Ambani led Reliance industries is now planning to buy a stake in the embattled Jet Airways. Moreover, the conglomerate is also looking to bail out the national carrier, Air India, which is burdened under heavy debt. English daily, the Indian Express reported that although Reliance industries hasn't submitted Expression of Interest (EoI) to the lenders for buying the beleaguered Jet Airways, yet the company may join Etihad Airways in its bid at a later stage. Etihad Airways, UAE's national airline, has already submitted an EoI to the lenders.
As per the existing FDI rules of the aviation sector, Etihad can raise its stake in Jet Airways under automatic route till 49 per cent. The rules further allow an NRI to buy 100 per cent in airline companies subject to the clearance from the government. However, the Reliance industry spokesperson declined to comment on the development, "Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges."
The parties are under discussion pertaining to the haircut lenders have to take and this is the possible reason for the delay in the resolution process. One of the sources added, "This is precisely the reason for the delay in resolution and the consequent grounding of Jet Airways." Apart from buying a stake in Jet Airways, Air India is also on Reliance's radar. One of the other sources privy to the development said, "It is a boardroom strategy and could be considered at a later stage. Discussions are slowly picking pace since the interested parties are of the view they still have time."
Last year in March, the central government issued preliminary information memorandum kicking off Air India's disinvestment process. However, the government did not receive any bids and was eventually forced to defer the strategic plan to sell its 76 per cent stake in the airline. The finance ministry had decided to sell the subsidiaries and assets of Air India to cut its debt of Rs 48,781 crore as on March 31, 2017.
