Bad market sentiment forces Jet Airways to put off rights issue

Jet AirwaysNew Delhi: India's biggest private sector carrier, Jet Airways, has put back a $400 million rights issue once again as sentiment on the country's financial markets worsened in line with global cues. Airline officials indicated that though the carrier had wanted to complete a rights issue before the end of the current fiscal year, they have now revised their plans.

The rights issue was initially planned for the second half of last year but was delayed then because of the global credit crunch.

Jet's board has approved the rights issue to help finance its $2 billion fleet and route expansion, as well as the overhaul of the Air Sahara fleet, which it took over in April last year and renamed Jetlite.

Airline officials indicate that they are now finalising their plans for the next probable date, though they are not working to a specific timeline.

Another move affected by bad market sentiment involves the raising of another $400 million through a private share placement.

Early in the year the carrier had announced a net loss of $23.1 million for the three months ended 31 December on the back of soaring fuel costs.

Jet's retreat from the markets would not surprise many as bad market conditions have already seen two other major public issues being withdrawn for lack of sufficient response from investors.