Jet Airways to raise funds for fleet expansion
Jet Airways is looking to raise capital to fund its fleet induction and expansion plans.
Jet has ordered 75 Boeing 737 Max and is negotiating for additional 75 planes of the same type. The airline had also ordered Boeing 787-9 planes but has deferred the induction.
Raising equity will help to arrange pre-delivery payments to Boeing, say sources familiar with the matter. “The fundraising will be for expansion,” he added.
The airline appointed J P Morgan to help raise funds. Jet’s management has been in talks with Delta for a stake sale. Simultaneously, its founder chairman Naresh Goyal is talking to Etihad too for capital infusion. Etihad holds 24 per cent stake in Jet Airways.
Jet Airways did not respond to an email query on the topic.
An Economic Times report today said major airlines like Lufthansa and Air France-KLM and private equity funds like KKR, Blackstone and TPG too have been approached for fund infusion. The report added that the airline will issue 24 per cent equity to the new investors and raise $ 200-250 million.
Fund raising will also help pare debt. The airline has around Rs 9,000 crore debt of which Rs 2,800 crore is related to aircraft acquisition. Jet made a consolidated profit of Rs 438 crore in FY 2017 but this was due to non operational items like gains from lease back of planes and from land development. “The airline would certainly want to cut debt and save interest cost,” a sector expert said.
