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Etihad to increase shareholding in Jet Airways to 49%?
November 30th 2018
Another week, another Jet Airways update. Read More » This week, India’s Economic Times reported that cash-strapped Jet has turned to Etihad Airways for a fresh capital injection and loans that could raise Etihad’s equity in Jet from the 24% to 49%.
If materialized, Etihad would be become the Mumbai-based carrier’s largest shareholder, while the equity held by founder Naresh Goyal and Anita Goyal would be whittled down from the current 51% to just 15%.
Jet said the reports were “speculative”, but this marked a sharp departure from previous rebuttals which the airline called “simply wrong” and “without foundation”.
“The company continues to be in active discussions with various investors to secure sustainable financing to navigate through the current headwinds and create long term growth,” Jet said this week.
Earlier this month, Jet announced it would undertake a "comprehensive review" of its network to cut unprofitable routes and improve the airline's financial standing.
"The strategy includes concentration of capacity, enhancing frequency, density and hub connectivity. The measures will include rationalisation of operations on selected uneconomic routes and the redeployment of these assets to more productive and economically efficient international as well as domestic sectors," Jet has said.
"The airline continues to engage with financial stakeholders in supporting its funding requirements until it starts generating an operational surplus. It is actively working on the monetization of its assets and capital infusion," the airline has added.
Jet has accumulated losses of more than INR108.8 billion (US$1.5 billion) in the last decade. Earlier this month, Jet appointed three global consultancies to help it secure funding and aid its restructuring drive.
