Jet Airways may sell 10% stake to Temasek for Rs 250 crore
JET Airways is learnt to be in advanced negotiations to sell 10% stake to the Singapore government-owned Temasek Holdings. World's Best Airport
By Mithun Roy, ET Bureau |
MUMBAI: JET Airways (India), the country���s largest private airline, is learnt to be in advanced negotiations to sell 10% stake to the Singapore government-owned Temasek Holdings. Sources close to the development said, Jet is planning to raise around Rs 250 crore from the stake sale. At this price, the valuation of the company is pegged at Rs 2,500 crore, which is 53% higher than the market capitalisation of the company.
���Jet has spoken with a handful of investors for fund raising. Temasek appears to be interested in picking up a slice in the company. A deal is likely to happen at a price which is between Jet���s expectation and the company���s ruling market price,��� said the sources. The stake sale is likely to take place through issue of fresh shares.
The Jet Airways stock slipped by 6.6% to close at Rs 188.85 on the BSE on Tuesday, putting the market capitalisation of the company at Rs 1,630 crore. The Jet spokesperson declined to comment. An e-mail sent to Temasek remained unanswered.
According to the sources, this round of fund raising, if takes place, may lead to another similar exercise next year, once the markets improves. The promoter Naresh Goyal holds close to 80% in the company.
Jet Airways has put its expansion plans on hold due to dearth of funds. It is expected to be underpressure in the next few quarters as the outlook for the industry seems to be challenging.
Mounting losses stemming from higher fuel prices prompted Jet Airways to forge a partnership with rival Kingfisher Airlines last month. Jet Airways, which controls one-third of the domestic market share, incurred its biggest quarterly loss in September, in more than three years on surging fuel expenses.
���Jet has spoken with a handful of investors for fund raising. Temasek appears to be interested in picking up a slice in the company. A deal is likely to happen at a price which is between Jet���s expectation and the company���s ruling market price,��� said the sources. The stake sale is likely to take place through issue of fresh shares.
The Jet Airways stock slipped by 6.6% to close at Rs 188.85 on the BSE on Tuesday, putting the market capitalisation of the company at Rs 1,630 crore. The Jet spokesperson declined to comment. An e-mail sent to Temasek remained unanswered.
According to the sources, this round of fund raising, if takes place, may lead to another similar exercise next year, once the markets improves. The promoter Naresh Goyal holds close to 80% in the company.
Jet Airways has put its expansion plans on hold due to dearth of funds. It is expected to be underpressure in the next few quarters as the outlook for the industry seems to be challenging.
Mounting losses stemming from higher fuel prices prompted Jet Airways to forge a partnership with rival Kingfisher Airlines last month. Jet Airways, which controls one-third of the domestic market share, incurred its biggest quarterly loss in September, in more than three years on surging fuel expenses.
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The company, which also runs low-cost carrier JetLite, suffered a net loss of Rs 384 crore in the September quarter, compared with a profit of Rs 283 crore in a year-ago period. Jet has set break-even target in 2010. However, analysts are sceptical about it. They said that Jet will not be able to achieve the target as it is expected to incur heavy losses in the current financial year.Start a SIP with as low as ₹500 with ET Money App!
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