Jet Airways Chairman, Mr. Naresh Goyal has announced that the company would lift up $400 million through a rights issue in the recent quarter. The income from the issue would be used to finance its growth plans

Mr. Goyal said, “We are in the process of raising $400 million through rights issue in the current quarter. I want our balance sheet to be strong.”

Before this, Mr. Naresh Goyal who holds 80% stake in the company would dilute 5% of his holding stake to comply with SEBI’s orders and enhance resources for the approaching rights issue.

“We are still on track. The rights issue will be launched in this quarter,” Mr. Goyal said. In July, the airline had planned to launch the issue in October but deferred it to January due to unfavorable market conditions.

Goyal will have to mop up around $300 million as his payment for the rights issue ,and is making discussions with financial institutions to raise a loan. The 5% equity dilution would bring in about $120 million, which could be utilized to fund the rights issue.

“As per regulatory requirement, I have to reduce my holding to 75 per cent before March 2008 end,” Goyal said.

While commenting on its plans for the new year (2008), Mr Goyal said: "We are finalising cargo airline, launching maintenance, repair, overhaul (MRO) facilities, setting up of training institute for pilots and training academy for cabin crew.”

“We are looking at setting up of MRO facilities at Delhi, Bangalore, Hyderabad, Chennai and Nagpur. We have to see who should be our partner, as at least 200 aircrafts are needed to break-even the cost of MRO facility,” Mr Goyal said.

During 2008, the airline is likely to conclude plans for a cargo carrier, and is in discussions with potential partners. After establishing the hub at Brussels in Europe, the company would also create a hub at South East Asia, at Bangkok or China.

Starting the new year (2008) with a big bang by making entry into the profitable West Asian segments, Jet Airways has aligned various plans in 2008. On January 5, the airline has launched multiple flights to Kuwait and Bahrain from Kochi, Mumbai and Delhi. More services to be added soon.

Mr. Goyal was speaking to newspersons at the Mumbai international airport after rolling out the airline’s flight to Kuwait and Bahrain. Jet also commenced its direct services from Kochi to Kuwait and from Delhi to Kuwait on the same day.

Undeterred by Vijay Mallya's decision to tap the international segment, Goyal said he would keep on enhancing in-flight services and operations to make Jet one of the top five airlines in the world.

While lecturing Mr. Mallya, Mr. Goyal said, “Kingfisher is my least worry. I am bothered about the big boys (read Singapore Airlines and Lufthansa). Our main competitors are big carriers from the Gulf, Europe and South Asian countries. I hope he considers me his friend.”

In 2008, Goyal would start a cargo airline, an MRO venture for which partners are being finalized. Jet would also set up training institutes for pilots and cabin crew both in India and abroad.