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Will Naresh Goyal stage a comeback?

A pact with Jet’s lenders allows him to participate in the auction, but will he have financial backing?

Lenders may have forced Naresh Goyal and his spouse Anita Goyal to resign from Jet Airways’ board to make way for a new investor who could turn the airline around, but going by the clauses of an agreement between the lenders and Mr. Goyal, the erstwhile aviation baron may still stage a comeback.

Though the agreement has several clauses that make it difficult for Mr. Goyal to have an easy ride so that the airline can be sold as a going concern to a new investor, the return of the Goyals cannot be ruled out.

As per the agreement, Mr. Goyal, whose holding has been reduced to 25.5% (including the 16% pledged with lenders), can still participate in the auction process. He can seize control by bidding aggressively, an analyst said.

‘Legally qualified’

“Legally, he is qualified to participate in the bidding process. But whether he has the financial resources to join the race is not known,” the analyst added. According to a person familiar with the development, Mr. Goyal is still camping in London and is possibly mobilising resources and may be trying to rope in a partner for a bid.

“Now that Jet Airways has got a new lease of life, Mr. Goyal will utilise the two months’ window to turn the tide in his favour. He is someone who will not give up so easily,” the person said.

However, most analysts disagree. “Mr. Goyal has virtually no chance to come back. First, there is a presumption in the IBC against the promoter who does not meet obligations. Lenders do not want to get such promoters back. And secondly, who will now fund him to participate in the bid? I don’t see anyone coming forward and he has no chance,” Shailesh Haribhakti, chairman DHC, a leading accountancy and advisory firm, said.

Tarun Bhatia, managing director, Kroll South Asia, said, “Banks have set a 60-day deadline to sell the company. Though the current promoters can participate in the bidding process, it is not that easy for them to be the winning bidder.”

“Removing the promoter from the board is a positive decision rather than no resolution at all. Banks would like to sell their entire holding to the new investor rather than selling a portion to Mr. Goyal. So, if he is able to acquire 50.1% and give banks an exit, then it could be possible. But does he have the money and the financial backer who could help? I don’t think so,” he said.

Since Mr. Goyal is now out of Jet’s board, Etihad Airways may decide to increase stake from 12% to possibly 49%. But going by its current financial condition, this seems unlikely. However, a final decision will be made by the end of this month.

“The auction process can [help] discover the best price for Jet,” Mr. Haribhakti said.

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