Jet Airways, India's largest airline in terms of marketshare, is looking at an equity dilution, said Founder and Chairman Naresh Goyal.
"Jet Airways will be going in for equity dilution of up to 20 per cent," he announced at the 18th annual general meeting of the company in Mumbai on Thursday.
The carrier also expects a qualified institutional placement of $400 million, said company officials at the AGM. Jet Airways had earlier planned a rights issue, but opted for the QIP route instead to raise money. The carrier already has Cabinet Committee on Economic Affairs approval for a $400-million QIP. However, the officials offered no time frame for the placement.
Jet Airways and JetLite together have the largest marketshare in the domestic sector at 26. 6 per cent. The company is on a capacity expansion drive and introduced a daily Mumbai- Johannesburg flight in April.
"We are looking at expanding our domestic capacity by 10-15 per cent," said Jet Airways Chief Executive Officer Nikos Kardassis.
"And will also be adding four to five more aircraft to our fleet. On the international front, we are still in the process of evaluating various routes," he added.
The carrier is also mulling the possibility of replacing some of its Bombardier CRJ aircraft with ATRs, said a company official at the AGM. Jet Airways currently has a fleet size of around 92 aircraft.
The company has also sought approval from Reserve Bank of India to raise $750 million through external commercial borrowings to repay its high-cost rupee loans, said Senior Vice-President-Finance M Shivkumar. RBI permission was requested as current norms permit funds to be raised via ECBs only to buy assets, not to repay loans.
Of Jet's Rs 14,818-crore debt, its short-term loans are Rs 3,000 crore. A major portion of short-term debt is working capital debt, and only Rs 500 crore is in (strictly) short-term debt and the airline does not need restructuring for this amount.
Jet ended the last financial year with losses of Rs 467.6 crore, but started the current financial year with a profit of Rs 3.5 crore in the first quarter.
The company is also close to finalising details of a joint venture with Godrej Properties to develop a 2.5-acre plot at the the Bandra Kurla Complex. "We are looking at a JV with an equal share for both partners and are likely to finalise the details in around three months," said Shivkumar.
Jet purchased this land in 2008 from the Mumbai Metropolitan Region Development Authority. Jet Airways and Godrej Properties will co-develop the plot.
The company's shares closed at Rs 781, or 0.73 per cent lower, on the Bombay Stock Exchange on Thursday. The scrip has risen almost 40 per cent in the last two months from approximately Rs 550.
