Jet Airways shareholders approve $ 400 million fund raising proposal

Etihad might invest in Jet Airways debentures

Jet Airways plans to raise $400 million (about Rs 2,500 crore) through non-convertible debentures or bonds to fund expansion. Last week, the airline notified the stock exchanges that it had secured shareholder approval to raise the debt. An extra-ordinary general body meeting to approve the plan was held last month.

Jet Airways founder-promoter Naresh Goyal owns 51 per cent in the airline. In 2013, Etihad picked up a 24 per cent stake in Jet investing $379 million (Rs 2,057 crore).

Etihad has denied media reports that it is in talks to raise its stake in Jet Airways. However, to a specific query on whether Etihad would invest in Jet debentures, its spokesperson responded with a “No comment”.

While the extraordinary general body meeting proposal stated that $400 million would be raised on private placement and did not specify any particular entity,  an earlier proposal specified that funds would be raised from Etihad.

In February, Jet secured shareholder approval through a postal ballot to raise $300 million through non-convertible debentures from Etihad or any other corporate body. Etihad had also purchased 50.5 per cent in Jet’s frequent-flyer programme for $150 million, as part of its investment commitment in Jet.  

It acquired three slots at London’s Heathrow Airport for $70 million.

Etihad had also helped Jet refinance Rs 1,800 crore of high-cost debt.

Jet has also requested the government to enhance the $300-million cap on airlines for raising of foreign funds for working capital.

Jet has already availed of foreign loans worth $300 million and has made the request seeking increase in its limit.