Jet Airways submits clarification to FIPB

Private carrier Jet Airways has submitted a clarification to the government after it deferred the airline's plan to raise $400 million through a share sale to foreign institutions.

"Yes, yes. We have written to them... Submitted clarification to the FIPB. Hopefully, the issue will be sorted out soon", Jet Chairman Naresh Goyal said when asked about the airline's plans to raise up to $400 million via QIP (Qualified Institutional Placements).

Talking to reporters on the sidelines of the Hong Kong-Guangdong business conference here, he declined to disclose any further detail on the proposed equity investment through the QIP route.

The Foreign Investment Promotion Board (FIPB), had on October one, deferred a decision on approving the proposal, after the Civil Aviation Ministry said the airline would breach the FDI cap of 49 per cent if it was allowed to go ahead.

Official sources had then said that Jet needed to rework its proposal to bring its foreign holdings down so that the FDI norms were not violated.

In August, Goyal had told the company's annual general meeting that the airline has sought government's permission to dilute up to a 20 per cent stake and had already applied to the FIPB. However, he had not specified any time-frame for it.

The largest domestic airline company had then also announced it plans to raise $400 million through QIP route.

According to the shareholding pattern available with the National Stock Exchange, the airline has 79.99 per cent non-resident Indian holdings as on June 30 this year.

Addressing the Hong Kong-Guangdong business meet, Goyal said Jet Airways, which had to stop its services to Shanghai due to global recession, "will fly to mainland China in the not too distant a future".

Even before the Mumbai-Shanghai-San Fransisco route started to break even, economic downturn took its toll and the service had to be stopped, he said.

With a burgeoning Indo-China trade and business relations, air traffic between the two countries was bound to grow in the near future, which the premier private carrier planned to capitalise on, the Jet chief said.

Hong Kong Special Administrative Region's Chief Executive Donald Tsang also said there was tremendous scope for air traffic between India and Hong Kong to pick up.

The loads on the India-Hong Kong route has been dominated so far by Cathay Pacific.