Jet Airways: SEBI Says Not Received any Reference on Relaxations of Regulations

Moneylife Digital Team 24 January 2019

Investor Interest

Market regulator Securities & Exchange Board of India (SEBI) has clarified that it has not received any reference on relaxing regulations in the Jet Airways Ltd matter. Some newspapers have published reports attributing views of SEBI on certain relaxations of regulations to Jet Airways.

In a statement SEBI says, "It is hereby clarified that SEBI has neither received any reference in this regard from any quarter nor has it expressed any views in the matter."

According to reports, State Bank of India (SBI) chairman Rajneesh Kumar was scheduled to meet SEBI chairman Ajay Tyagi for a proposal to revive the ailing carrier. "Etihad Group chief executive (CEO) Tony Douglas earlier wrote to SBI, saying that the airline will invest in Jet only at Rs150 per share. Etihad wants an exemption from SEBI on preferential pricing and open offer guidelines in order to invest more money in jet for its bailout," a report from CNBC-TV18 had said.

Abu Dhabi-based Etihad, which owns 24% in the Indian carrier, and Jet Airways chairman Naresh Goyal, who owns 51% of the troubled airline, have been clashing over how to revive the airline, which defaulted on loans last month. Jet Airways owes more than Rs8,000 crore to lenders.

The SBI chairman met SEBI chief on Wednesday; however, no details were available about issued discussed between them.

Last week, Mr Kumar had said that SBI-led consortium of lenders had not rejected Etihad Airways’ bailout offer for debt-rideen Jet Airways and was waiting for SEBI decision on exemption to the UAE-based carrier. “If no regulatory exemption is required, then it is easier (to resolve). If a regulatory exemption is required, then they have to approach the regulator and we need to know the regulator’s view," the SBI chief was quoted as saying in a report from Business Standard.

Quoting sources, a report from Economic Times says that market regulator is unlikely to give an exemption to Etihad from making an open offer to minority shareholders of Jet Airways.

“The current regulations do not permit any such exemption. The rules permit exemptions only for those companies that are being resolved under the bankruptcy code,” one person, who is involved in the process, told the newspaper.

Etihad, for pouring more funds in the Indian carrier, wants Mr Goyal to give up his seat on the board and cut down his stake to 22% from 51% at present and the debt should not be converted into equity. At the same time, the Jet Airways promoter had reportedly told SBI that he was ready to invest up to Rs700 crore and pledge all his shares if he is allowed to retain 25% stake in the carrier, the report from Business Standard says.

Last year, in August, there were reports about Jet Airways raising a $400 million fund from private equity (PE) players. However, the carrier had said that the article published by Economic Times was 'purely speculative in nature'.

Comments

User

Meenal Mamdani

7 years ago

Naresh Goyal should be forced to step down. The airline has suffered significant losses under his management. Both Etihad and Tatas had demanded that as a condition of putting more money into the airline.

We will see if Goyal has any pull with the current govt and manages to get the rule change that he wants. If he does, then we will know that Modi govt is as pliable as the previous UPA govt.