The Hindu Business Line : Jet finalising sale of 5% of promoters’ equity

Mumbai, Jan. 5 Mr Naresh Goyal, Chairman, Jet Airways, said he would go in for a private placement of shares or a qualified institutional placement (QIPs) shortly to dilute the promoters’ equity stake in the airline by five per cent.

As per the Securities and Exchange Board of India regulations for listed companies, the Jet Airways promoter has to bring down his equity stake from 80 per cent to 75 per cent before March 2008.

Mr Goyal said he was in talks with the merchant bankers and details of the equity sale would be finalised soon. Jet Airways will also launch its proposed $400-million rights issue in the current fiscal. Jet Airways shares closed at Rs 995.45 on Friday on BSE, down by 0.18 per cent.

South Asian Hub

Jet, the largest private airline in the country, plans to start a South Asia hub either in Bangkok or in Kuala Lumpur, Mr Goyal said. This would enable Jet to offer services to more international destinations and also operate more flights out of the proposed hub. As the airline has code sharing agreements with several airlines including Qantas of Australia, ANA of Japan and Malaysian Airlines, the Asian hub would help it cater to its passengers better. This would be Jet’s second international hub; it has a hub in Brussels with the support of Brussels Airline.

Mr Goyal was speaking to reporters at the Mumbai international airport after launching the airline’s flight to Kuwait and Bahrain. Jet also started today its direct services from Kochi to Kuwait and from Delhi to Kuwait.

Flights to China

He said Jet is waiting for the regulatory approval to start direct flights from Mumbai to Shanghai and to San Francisco in the US. “We hope to launch the flight within the next one month,” he said. However, it is learnt that the Chinese government is yet to clear Jet’s proposal as it is said to be awaiting India’s clearance for China’s Great Wall Airlines to start cargo operations in India.

Mr Goyal said Jet has achieved an average seat factor of 68 per cent in its US service in the last four months. The US service via Brussels was started in August 2007.

In the India-UK sector, he said Jet has a 23-per cent market share.

Mr Goyal denied reports that the Jet CEO, Mr Wolfgang Prock- Schauer, was quitting to join Kingfisher airline. “He is not leaving, he is going to stay,” said Mr Goyal. But he quickly added, “Even if one leaves, there are 10 others waiting to join us.” Mr Prock-Schauer’s five-year term ends later this year.

Mr Goyal said Singapore Airlines has refused to accept Jet’s passengers for onward journey. “They are not accepting our documents, we are going to take it up with them,” he said.

Related Stories:
Jet’s $400-m rights issue by Dec-Jan
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