Govt defers Jet Airways plans to raise $ 400 million | business | Hindustan Times
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Govt defers Jet Airways plans to raise $ 400 million

business Updated: Oct 22, 2009 20:59 IST

The government has deferred a proposal of Jet Airways to raise $ 400 million (about Rs 2,000 crore) to meet its cash flow requirements.

The government deferred the proposal by Jet Airways to raise funds by selling equity to foreign institutional investors (FIIs) through Qualified Institutional Placement (QIP) route, according to an official statement.

The airline had planned to raise the funds from FIIs as the appetite for domestic investment in the aviation sector in India is not strong.

To raise the amount, the airline proposed to issue 7.92 crore fresh equity shares (at a price of Rs 252.50 per scrip).

The move, if it goes through, would change the shareholding pattern in Jet, bringing down promoters' holding to 42 per cent from 80 per cent at present. On the other hand, QIB shareholding, including domestic investors and FIIs, would go up to 48 per cent, according to sources.

Meanwhile, the other outside holding would decline to 10 per cent.

India allows only 49 percent Foreign Direct Investment in air carriers.

The airline intended to raise the money to meet the cash flow requirements and had got the shareholders approval for the same.