Conditional clearance for Jet QIP likely

New Delhi: The ministry of civil aviation has suggested a "conditional" clearance for Jet Airways' proposal to raise $400 million through the qualified institutional placement (QIP) route.
In its recommendation to the department of industrial policy and promotion, the ministry has permitted Jet to raise this money even when this move could raise the foreign direct investment (FDI) in the carrier beyond the permitted 49% cap for scheduled air transport services.
The catch is the "checks and balances" the ministry has proposed.
"We have written a special note mentioning these checks and balances before the airline is allowed to raise money by this route. The most important thing we have said is that Jet promoter Naresh Goyal cannot sell off his stake or that owned by companies promoted by him in Jet Airways... we don't want the airline to be sold off," highly placed sources told DNA.
The Foreign Investment Promotion Board is believed to have given an "in principle" approval to Jet's proposal and asked it to comply with the overall 49% FDI cap within three years. Now, the proposal will probably also need clearance from the Union Cabinet since it involves an inflow of over Rs 600 crore.
09/11/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: Jet Airways Nov 2009