Jet Airways stock closes 7.95% lower after Etihad offers to invest at discount in ailing carrier

The Jet Airways stock fell in trade today amid reports that Etihad Airways offered to invest in the debt-laden carrier at a discount. The discount was as much as 49% to its closing price of Rs 293.70 on NSE on Tuesday. Etihad Group CEO Tony Douglas has written a letter to SBI Chairman Rajnish Kumar on restructuring of the Indian airline. The stock closed 7.95% or 23.40 points lower at 271 level on the BSE today.

Etihad said it would invest in Jet Airways only at Rs 150 per share and not pledge more shares to raise money for the carrier, according to a report by CNBC TV 18. The news is a setback for the ailing carrier which had Rs 8,052 crore of debt on its books as on September 30.

As per the shareholding pattern available on the BSE, promoter Naresh Goyal owns a 51 per cent stake in Jet Airways and Etihad Airways owns 24 percent.

Earlier, reports said Etihad Airways may hike its stake in the company to 49 per cent through an open offer.

Now, Etihad Airways has sought a written exemption from the open offer.

The small cap stock plunged up to 9.63% at 266 per share compared to yesterday's closing price of Rs 294 on the BSE. The stock had gained over 22% in the last two sessions amid hopes that lenders would come up with a comprehensive plan to deal with its crippling debt crisis.

Also read: Jet Airways' delayed salaries can lead to security risks, warns DGCA

The stock has fallen 65.77% during the last one year. The stock is trading above its 50-day and 200-day moving average of 267 and 268 levels respectively.

The huge debt has led to a backlog of over two months in salary payments to its senior staff, including pilots and engineers. The full-service carrier, which has been grappling with financial woes for some time now, has been making delayed salary payments to its staff.

The airline continued its poor financial earnings show when it announced its Q2 earnings on November 13, 2018. The airline reported its third consecutive quarterly losses for the quarter ending September, with a consolidated net loss of Rs 1,261 crore, roiled by higher fuel cost that soared 59 percent, and a steep rupee fall that led to a seven-fold spike in forex losses.

The Naresh Goyal-run airline, which is part-owned by Gulf carrier Etihad Airways, had posted a net profit of Rs 71 crore in the same period last fiscal.

On November 19, 2018, the stock saw some profit booking after its rose 41.13% in the last four sessions amid reports that Tata Group was likely to acquire the struggling carrier.

On January 2 this year, the shares of Jet Airways which owes over Rs 8,000 crore to SBI-led consortium tumbled nearly 7 per cent after the crisis-hit firm defaulted on repayment of loans to a consortium of Indian banks.

 Edited by Aseem Thapliyal