Centre seeks clarifications on Jet Airways QIP

Bangalore: The fund-raising plan of Jet Airways, the market leader by passenger numbers, got pushed back again as the government on Thursday sought more clarification on the airline’s qualified institutional placement (QIP) issue.
Jet had submitted a proposal to the Foreign Investment Promotion Board for raising $400 million through QIP to deleverage its balance sheet and implement expansion plans.
Kapil Kaul, chief executive officer - India and Middle East of airline consultancy Centre for Asia Pacific Aviation, said it since the airline already has an in-principal approval from the government for raising funds from overseas the markets, it should eventually get through.
He said the impediment in getting the FIPB approval could be the sectoral limit for foreign direct investment (FDI) in the aviation sector, which is currently at 49%.
“FDI cap could be the only issue on which the government must have asked for clarification. On this front, the government could temporarily relax the (FDI) norm in Jet Airways’ case on one-off basis,” said Kaul.
Kaul speculated that the government may give its nod to Jet’s proposal to raise foreign funds on the condition that it would bring back its FDI within limits in the specified time.
08/10/10 Praveena Sharma/Daily News & Analysis

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Categories: Foreign Oct 2010, Jet Airways Oct 2010