Jet to sell land in Mumbai to raise Rs 1,000 cr

Jet Airways expects to raise over Rs 1,000 crore by selling 2.5 acres of premium land it owns in the Bandra Kurla area in Mumbai. The move will partly help the company to raise about $400 million (roughly Rs 2,000 crore) to cut its debt burden of Rs 15,885 crore.

“We have pieces of land in Bandra Kurla and the ground-breaking ceremony for one of them has been done recently. We can raise over Rs 1,000 crore from this property alone,” said an official. The land could be handed over to a developer for a combination of cash and office space.

The airline, which made a Rs 225-crore loss in the quarter ending June 2009, also plans to cut debt by leasing aircraft and raising equity through a qualified institutional placement (QIP) of about $200 million in the first tranche and depending on market conditions. A two-year-old plan to raise Rs 4,000 crore through a rights issue has been on the backburner, owing to poor market conditions.

In a detailed application to the Foreign Investment Promotion Board for the QIP issue, the airline, which recently suffered a pilots' strike over pay and allowances, detailed various measures it has taken to tackle the downturn. For instance, the company said it has suspended operations on loss-making international routes like Amritsar-London and Mumbai-Shanghai-San Francisco. It has also replaced high-capacity Boeing 777-300ERs with the lower capacity Airbus 330-200 on long-haul flights to New York and Newark.