Cash-strapped private airline Jet Airways will raise about Rs 2,500 crore through a rights issue, media reports say. Lenders to the company that has defaulted on debt repayment will also look at a debt-to-equity conversion. While the Naresh Goyal-founded company's creditors may convert Rs 1,000 crore of debt into equity, they will also bring in more equity through a rights issue as part of a deal the airline had with the lenders. Goyal and foreign partner Etihad Airways, which has a 24 per cent stake in the airline, will infuse approximately Rs 2,000 crore into the airline, a report quoting an unidentified source said.
The government-owned National Investment and Infrastructure Fund (NIIF) is likely to buy up to 20 per cent stake amounting to Rs 1,500 crore, a report on the Business Standard website said. NIIF and banks will together come to own a 51 per cent stake in the company.
The lenders approached NIIF after Etihad Airways refused to increase its stake beyond 25 per cent in the absence of an exemption from the open offer requirement. Etihad failed to secure such an exemption from the Securities and Exchange Board of India (Sebi).
Etihad Airways plans to infuse Rs 1,450 crore more to maintain its stake at 24 per cent while Goyal would bring in Rs 550 crore to keep his stake at around 21 per cent, according to the report. Goyal has already infused Rs 250 crore into the airline.
"At the first stage of the resolution plan, lenders have agreed to convert around Rs 1,000 crore of debt into equity. In the second stage, there will be a rights issue of around Rs 2,500 crore in which banks will participate. This process is subject to approval from the promoter, lenders and Etihad Airways. It may take around two months to close," the report said quoting an official with a lender. There are also reports that the SBI-led consortium of banks would release around Rs 550 crore in 15 days to bridge the immediate funding gap.
16/02/19 Prathapan Bhaskaran/IBTimes
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The government-owned National Investment and Infrastructure Fund (NIIF) is likely to buy up to 20 per cent stake amounting to Rs 1,500 crore, a report on the Business Standard website said. NIIF and banks will together come to own a 51 per cent stake in the company.
The lenders approached NIIF after Etihad Airways refused to increase its stake beyond 25 per cent in the absence of an exemption from the open offer requirement. Etihad failed to secure such an exemption from the Securities and Exchange Board of India (Sebi).
Etihad Airways plans to infuse Rs 1,450 crore more to maintain its stake at 24 per cent while Goyal would bring in Rs 550 crore to keep his stake at around 21 per cent, according to the report. Goyal has already infused Rs 250 crore into the airline.
"At the first stage of the resolution plan, lenders have agreed to convert around Rs 1,000 crore of debt into equity. In the second stage, there will be a rights issue of around Rs 2,500 crore in which banks will participate. This process is subject to approval from the promoter, lenders and Etihad Airways. It may take around two months to close," the report said quoting an official with a lender. There are also reports that the SBI-led consortium of banks would release around Rs 550 crore in 15 days to bridge the immediate funding gap.
16/02/19 Prathapan Bhaskaran/IBTimes
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