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Jet to sell 10% to institutions

Mumbai, March 25: The promoters of Jet Airways, India’s largest private airline, are planning to sell a 10 per cent stake to institutional investors before floating a $400-million public issue in June.

Jet is in talks with three to four institutional investors and banks that are keen to pick up a stake in the loss-laden airline. The promoters’ holding will come down to 70 per cent after the stake sale.

“We are not issuing fresh shares. The 10 per cent stake will be sold directly from the promoters’ share to a competent institutional investor. We have not shortlisted any company yet. We will enter into a deal with whoever agrees to pay a higher premium. We expect to close the deal in 2 to 3 weeks provided the market conditions remain good,” a senior official at Jet Airways told The Telegraph.

Tail Winds, a company registered in the Isle of Man, holds almost the entire 80 per cent promoters’ stake in Jet Airways.

Jet Airways went public in March 2005 through an initial public offer. The shares were listed on the BSE at Rs 1,100. Since then, the prices of Jet’s shares have fallen dramatically, especially after it acquired Sahara Airlines in 2006 and renamed it as JetLite. The Jet stock closed today at Rs. 548.65.

Analysts believe the stake sale is designed to secure a premium valuation for the only private airline that flies to overseas destinations. It will set a price benchmark for the rights issue.

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