Jet to raise Rs 500cr for land deal with Godrej Properties

The market may have cheered Jet Airways ' deal with Godrej Properties to jointly develop its (Jet’s) land at Bandra Kurla Complex, but it could be a while before profits from the venture start rolling in.
In the meantime, the loss-making airline will have to add another Rs 500 crore to its debt burden. Jet has to pay that much to Godrej Properties as its share towards additional floor space index and construction costs of the commercial towers.
However, M Shivkumar, senior vice president, finance at Jet told moneycontrol.com: “We don’t have to pay anything right now to GPL.”
But Godrej Properties met a group of analysts after the announcement of the deal on Friday to explain the contours of the deal to them.
“Godrej is trying to get an additional floor space index (FSI) from Mumbai Metropolitan Regional Development Authority (MMRDA) for which Jet and GPL will together have to shell out Rs 500 crore. Since it’s a 50:50 joint venture, Jet will have to give its share of Rs 250 crore,” said an analyst who was present in the meeting with GPL management after the announcement of the deal
06/08/11 moneycontrol.com

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Categories: Jet Airways Aug 2011