CCEA approves $400 mn foreign funds for Jet Airways

December 24th, 2009 - 5:48 pm ICT by IANS  

Ambika Soni New Delhi, Dec 24 (IANS) The Cabinet Committee on Economic Affairs (CCEA) Thursday gave its approval to private carrier Jet Airways to raise foreign investments up to $400 million (Rs.2,000 crore) through the qualified institutions placements (QIP) route.
“The Cabinet Committee on Economic Affairs has approved to the proposal of Jet Airways as recommended by Foreign Investment Promotion Board (FIPB) seeking approval for offering to and participation by eligible foreign institutional investors to raise capital up to $400 million through the QIP route,” Information and Broadcasting Minister Ambika Soni told reporters after the CCEA meeting.

Under the QIP route, securities are placed with institutions much like private placements to raise funds.

The funds to be raised will be used to meet the cash flow requirements, the shareholders’ approval for which had been got July 24.

Post-announcement, the airline’s scrip rose 2.36 percent on the Bombay Stock Exchange to touch 566.40.

A Jet spokeswoman told IANS the carrier would make a comment only after it received a copy of the CCEA order.

The proposal was recommended for the consideration of the CCEA as the investment involved is above Rs.600 crore ($120 million).

Jet Airways, which has the largest market share of 25.3 percent according to official figures for January-November 2009, has hefty debts and losses of over $206 million (Rs.1,032 crore) in 2008-09.

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