Jet Airways seeks investors' nod to sell frequent flyer business

Jet Airways has sought shareholders' approval for selling its frequent flyer programme business to Jet Privilege Private Ltd (JPPL), a subsidiary, for Rs 695.21 crore.

The company sought approval of shareholders to transfer, sell or dispose of the Jet Privilege frequent flyer programme to its subsidiary Jet Privilege Private Ltd "as a going concern on a slump sale basis".

Separately, fair trade watchdog Competition Commission of India (CCI) had last week approved Etihad's 50.1 per cent stake purchase in JPPL.

Under such loyalty programmes, airlines offer certain benefits to their "frequent-flyer" customers.

"...the Board of Directors to make investments in, acquire by way of subscription, purchase or otherwise the share capital of JPPL for a consideration of Rs 6,952,106,616 by acquiring equity shares of JPPL (representing up to 49.9 per cent of the share capital of JPPL on a fully diluted basis) by way of a new issuance in one or more tranches," a Jet Airways postal ballot notice said.

The last date for receiving postal ballots from shareholders is March 14 and the results will be announced by
March 22.

Jet Airways last week reported a net loss of Rs 267.89 crore for the quarter ended December 2013.

The carrier, which recently completed the sale of 24 per cent holding to Abu Dhabi-based Etihad Airways, had registered a net profit of Rs 85 crore in the year-ago period.

Jet and JPPL had entered into a 'slump sale agreement' and a 'commercial agreement' on November 19, 2013, for the purpose of hiving-off the airline's loyalty business into JPPL and to establish a commercial relationship between them.

Shares in Jet, on Wednesday, ended at Rs 220.60 apiece on the BSE, down 1.76 per cent from the previous close.