Jet gets shareholders’ nod to raise about Rs2,000 crore

Private airline Jet Airways has secured its shareholders' approval to raise up to $400 million (Rs1,917 crore) to meet its working capital requirements, the company has told the Bombay Stock Exchange in a filing.

"Shareholders at the extraordinary general meeting of the company held on September 24, 2009 have passed the requisite resolution regarding the issuance of additional capital up to $400 million," Jet said in a filing to the Bombay Stock Exchange.

The airline had earlier said it would raise the amount by private placement of shares with qualified institutional buyers or through global depository receipts, American depository receipts, and foreign currency convertible bonds. The airline has also been talking to various bankers to raise this amount through qualified institutional placements.

Jet has been trying to raise funds through rights issues for the past three years, but has failed due to adverse market conditions. The private airline suffered a net loss of Rs225 crore for the quarter ended 30 June 2009 on a total income of Rs2,428 crore.

Chairman Naresh Goyal said Jet had last year deferred plans to raise funds via rights issue owing to volatile market conditions. The airline had planned to launch an issue in October last year, but deferred it to January 2009. To date, it has not raised funds via rights issue.

At its annual general meeting held earlier this year, Goyal had said that he would sell 5-10 per cent of his personal stake in the company. Goyal currently owns 80 per cent of the airline.

He said Jet is open to other sources of funding. ''Banks believe in us and would be willing to give us money when required. We are open to private equity placement and all other options. Money is not a problem for us,'' Goyal claimed.