Goyal stake may fall by up to 27%

Mumbai: Naresh Goyal may have to settle for a lower stake in Jet Airways (India) Pvt. Ltd as the struggling airline finds the door to other funding options slammed shut and prepares to sign off on a plan to sell $400 million (Rs1,844 crore) worth of new shares to large investors through a qualified institutional placement, or QIP.
Goyal set up Jet Airways in 1992 and owns 79.99% of it through Tail Winds Ltd, his investment company registered in the Isle of Man.
The extent of the stake reduction depends on how much money the company he heads eventually raises from investors. An initial $200 million QIP will pull down his stake to around 65%, but this could plummet to as low as 53% in case there is a $200 million follow-up QIP.
Funds are also expected to be generated through sale and leaseback deals with financiers and a plan to sell two plots of prime land at the Bandra Kurla Complex in Mumbai, home to several large companies and financial institutions.
Jet Airways is also moving ahead with plans to cut costs, rework routes and build a more robust hub-and-spoke network to help it navigate a turbulent patch for the global airlines industry.
Two senior Jet executives said that the airline was originally considering a mix of a rights issue and a QIP to raise the $400 million. Goyal preferred a rights issue to avoid diluting his control. Both executives spoke on the condition of anonymity.
17/11/09 P.R. Sanjai/Live Mint

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Categories: Jet Airways Nov 2009