Jet to mop up $200 m via QIPs

Mumbai: Private carrier Jet Airways, which has been struggling to mop-up funds for nearly two years, said it will be raising $200 million in the coming 3-4 weeks through the QIP route. The airline also has plans to go back to the market in May or June to raise another $200 million.
M Shivkumar, senior vice-president (finance), Jet, said the first tranche of funding would be through placement of shares with institutions. “With that, we should be able to raise around Rs 1,000 crore.” Jet’s total debt as of December 2009 stands at Rs 14,200 crore and the company’s debt-equity ratio is about 7:1”. The company is believed to have borrowed at an interest rate of around 9 %.
K. G Vishwanath, vice-president, Commercial Strategy, Jet, added the airline has not yet finalised lead managers for the QIP placement. “The QIP will be priced in line with market expectations,” he said.
Jet, which operates 106 aircraft, has also deferred the purchase of 13 aircraft for two years. Had it bought the aircraft, the debt would have been higher by Rs 7,500 crore. The company is spending nearly Rs 800 crore annually to service the debt. According to one domestic brokerage, it’s possibel the Jet isssue would be priced in the region of 420-450 per share.
03/02/10 Shaheen Mansuri/Financial Express

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Categories: Jet Airways Feb 2010