The Hindu Business Line : Jet Airways to hold $400-m rights issue till ‘market settles’

No distress offer: Mr Naresh Goyal, Chairman, Jet Airways, and Mr Wolfgang Prock-Schauer, Chief Executive Officer, addressing a press conference in Mumbai on Thursday. —

Our Bureau

Mumbai, April 3

The Jet Airways Chairman, Mr Naresh Goyal, said on Thursday that the airline will wait for right market condition for come out with its $400-million rights issue.

“We will not do a distress sale. We will hold the rights issue till the stock market settles,” Mr Goyal told newspersons on Thursday at the announcement of the airline’s expansion plans on international routes.

The airline had planned to launch the issue in October last year, but deferred it to January due to unfavourable market conditions.

While Mr Goyal declined to give any firm time frame for the rights issue, he said he would dilute five to 10 per cent of his personal stake in the company. He refused to give a time frame for that as well.

Mr Goyal currently holds 80 per cent stake in the airline company. He added that Jet is open to other sources of funding, “Banks believe in us and would be willing to give us money when required. We are open to private equity placement and all other funding options. Money is not a problem for us,” refusing to divulge any specific details.

The capex for Jet Airways and its low-cost arm Jetlite for 2008-09 would be $4.2 billion and, according to Mr Goyal, both carriers would turn profitable next year.

Cargo growth

Jet expects revenues from cargo to grow from the current 8 per cent to 15 in the next six to 12 months.

Answering a question on its plans for a cargo airline, Mr K.G. Vishwanath, Senior General Manager, MIS and Investor Relations said, “We are still not utilising the entire capacity of the belly space in our aircraft. We intend to do that first and focus on consolidation on the international front at the moment.”

To expand its overseas operations, Jet will start flights connecting Mumbai with San Francisco via Shanghai from May 5, Mr Goyal said. It will operate daily flights from Mumbai to Hong Kong and Muscat from April 14 and April 18 respectively, he said.

The carrier will also start daily flights from Kochi to Doha from April 21. In addition, Jet will operate daily flights to Abu Dhabi from both New Delhi and Mumbai from April 23.

Stock prices of Jet Airways closed at Rs 538.20 on Thursday, down 2.05 per cent.

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