Jet Airways has deferred its $400 million rights issue to March. Prior to this, Jet Airways chairman Naresh Goyal who holds 80 per cent stake in the company would dilute 5 per cent of his holding to comply with SEBI's guidelines and to augment resources for the rights issue.
"We are still on track. The rights issue will be launched in this quarter," Goyal said while denying any delay. In July the airline had planned to launch the issue in October but deferred it to January due to unfavorable market conditions.
Goyal will need to mop up nearly $300 million as his contribution for the rights issue and is talking to financial institutions to raise a loan. The five per cent equity dilution would augment around $120 million and this amount could be utilized to fund the rights issue. "As per regulatory requirement, I have to reduce my holding to 75 per cent before March 2008 end," Goyal said. The rights issue is planned to fund induction of aircraft and Air Sahara acquisition last year.
Starting the year with a big bang by entering into the lucrative West Asian sectors, Jet Airways has lined up several initiatives in 2008. On January 5, the airline launched multiple flights to Kuwait and Bahrain from Kochi, Mumbai and Delhi. More services to be added soon.
Undeterred by Vijay Mallya's determination to tap the international sector, Goyal said he would continue to enhance inflight services and operations to make Jet one the top five airlines in the world.
"Kingfisher is my least worry. I am bothered about the big boys (read Singapore Airlines and Lufthansa). Our main competitors are big carriers from the Gulf, Europe and South Asian countries," Goyal said addressing Mallya as his one-sided friend. "I hope he considers me his friend."
In 2008 Goyal would start a cargo airline, an MRO venture for which partners are being finalized. Jet would also set up training institutes for pilots and cabin crew both in India and abroad. It would open new routes to Hong Kong and San Francisco via Sanghai in China. Other sectors planned include Bangladesh and Male. JetLite would fly into the Middle East for which applications have been submitted. Jet and JetLite will have common engineering and airport staff for better integration and reaping the benefits of consolidation. "The main objective is to remain profitable when 98 per cent of the global airline industry is making losses. The year 2008 is more challenging due to recession in the US and spiraling oil prices," Goyal added.