Indian budget airline Jet Airways is now planning to raise ₹2,500 Crore through rights issue. The cash-crunched airline is looking for infusion of some fund and this new plan of rights issue is part of that. Along with this the airline is also mulling over other options like, debt to equity conversion.
Rights issue or rights offering is an issue of shares offered at a special price by an entity to its existing stakeholders in accordance to the proportion of their previous stakes.
SBI led lenders consortium will be converting airline’s ₹1000 Crore debt into equity. Naresh Goyal and its foreign partner Etihad Airline will infuse ₹1000 Crore each as per the sources close to the ongoing development.
NIIF (National Infrastructure Investment Fund) can also buy 19% shake in the company, which will help it raise around ₹1,500 Crore.
“At the first stage of the resolution plan, lenders have agreed to convert around ₹1,000 crore of debt into equity. In the second stage, there will be a rights issue of around ₹2,500 crore in which banks will participate. This process is subject to approval from the promoter, lenders and Etihad Airways. It may take around two months to close,” said an official of a state-owned lender.