Jet Airways to offload 10 per cent stake to global funds
01 Oct 2008
Mumbai: India's largest private sector airline Jet Airways, is looking to offload a 10 per cent equity stake to international funds, according to the airline's chairman Naresh Goyal.
Goyal has around an 80 per cent stake in the company. Speaking to the media after the company's annual general meeting, Goyal said that the dilution is likely to go up 15-20 per cent in near future.
Jet Airways stock has been around the Rs394 mark, down 4.14 per cent at the start of the week, and at prevailing prices, a 10 per cent dilution could bring in around Rs340 crore.
Additionally, the company plans to raise around $800 million through a qualified institutional placement of equity shares, and $400 million through a rights issue. According to KG Vishwanath, senior general manager, Jet Airways, the rights issue will be launched when market conditions are favourable.
Jet Airways is also looking to raise $1 billion via debt to finance the delivery of its five A330 Airbus and three Boeing 777. Jet's loss last year was around Rs800 crore.
Jet Airways controls around a third of the domestic market share, and also operates the former Air Sahara, rechristened JetLite, a low-cost airline. Vishwanath said it is difficult for low-cost carriers to stay in business with low fares, adding that the aviation industry in the country still suffers from 20 per cent over capacity, mandating that fares need to go up.
Jet plans to increase airfares by 10 per cent in October to offset losses incurred over the past few quarters due to high ATF prices, and achieve break-even ahead of schedule. As per its own admission, the airline would like to break-even in 2010.
