The share price of Jet Airways jumped up by nearly seven percent on Friday after reports that the airline is close to reaching a deal with Tata Sons, an Indian conglomerate, were released.
The stock was up by 6.26 percent on Friday afternoon. It also reached a two month high, rallying by almost 60 percent over the past month.
Tata Sons ended the weeks of speculation on Friday by disclosing that it is considering an acquisition of Jet Airways, however, the holding company of the $103 billion Tata Group disclosed that it has made no offer to the airline yet.
After a board meeting that lasted for more than four hours at the headquarters of the Tata Group in Mumbai, Tata Sons stated: “We would like to clarify that any such discussions have been preliminary and no proposal has been made.”
The debt-laden airline looks to be set to be acquired by Tata Sons with its board set to talk about the terms of a deal that would see it take a controlling stake very soon.
Natarajan Chandrasekaran, the chairman of Tata Sons, is likely to present a business viability plan to the board today with a suggested acquisition of the cash-strapped firm.
Earlier this week, Amit Agarwal, the deputy chief executive and chief financial officer of Jet Airway, had admitted that the firm was in negotiation with “multiple interested parties.”
In these discussions, the firm would be considering capital infusion and selling six of its Boeing 777 planes along with a stake in Jet Privilege, its loyalty programme.
The huge loss in its market value for the September quarter was mainly accounted for by the increasing fuel costs, strong competition from its rivals, and the depreciating value of the rupee.
It was the third straight quarter of losses for Jet Airways, however, the increase in the share price today will be welcome news for the company.