NEW DELHI: Naresh Goyal, the master of strategy who worked the corridors of power in Raisina Hill for long decades to successfully build and run one of India's most successful airlines virtually from scratch, ran out of luck last Thursday when his creditors shut down his airline denying any further financial lifelines.
The money may have come through but for fears among PSU bank chiefs over alarms sounded by opposition parties of favours being doled out to a private industrialists, say insiders. The Congress party came out in the last week of March stating, "India's leading public-sector bank SBI and others banks like Punjab National Bank, Canara Bank, Syndicate Bank and Allahabad Bank are now being used to bail out Jet Airways."
After that there were meetings and a hurried attempt to rope in a white Knight bidder for the troubled airline but no more bank funds.
"Bankers needed to take stock of whether the interim funding would help revive the ailing airline or it would be like putting money down a black hole… Also every PSU CEO has to think of Parliamentary oversight, vigilance etc." admitted Sanjay Bhattacharya, former Managing Director of State Bank of India.
Bankers' decided that they, like Caeser's wife, too must be above suspicion.
In the crash that followed, the valuation of Naresh Goyal's personal stock ownership as well as that of lenders and investors in his airline has shrunk by a record 74 % in just one year and is likely to shrink further in the weeks ahead as Banks agonise over the fate of the airline and ways to get back their Rs 9,000 crore in debt to it.
Time and again Goyal had used India's state run banks as well as newbie private sector lenders besides foreign airline funders as a lifeline to cobble together funds for expanding his airline and at times to keep it afloat. Sources close to him say that he had hoped till the end that bankers would once again do the needful.
Goyal who started out life as an employee in his uncle's East West Travels on a monthly salary of just Rs 300, had long mastered the art of charming India's and the World's Who's Who to build his personal business empire.
Right from 1993-94 when he started Jet Airways through a firm Tail Winds registered in the Isle of Man, he had always managed to rope in funders. Among shareholders in Tail Winds were Gulf Air and Kuwait Airways, which together held a 40 % stake.
The flirtation with banks started seriously in 2008 onwards when crude oil prices hit $120 a barrel and he started furiously taking loans to fund his operations. The cycle of debt taken for operations and for growth had to degenerate and bust at some point. By October last year the signs were clear - its short-term debt taken at high interest rates were 46 % of its total debt, compared to SpiceJet's 35 % and Indigo's 9 %.
Still Goyal had hopes he would be able to ride out the wave. His hopes were supported by indications from top bankers that a lifeline of anything varying from Rs 1,500 crore to Rs 3,500 crore may be in the works for him through February and March.
Rumours that he would get money kept the stock market hopes alive despite all the clues of an impending bankruptcy starting with the huge losses, long list of unpaid creditors, threats by unpaid pilots to strike work and repossession of fleet by lessors.
However, the end as always was a cruel one not only for the rich promoter but more so for the tens of thousands of unpaid employees, customers and lenders all of whom stare at a void as far as money goes unless a miraculous revival can be conjured.
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