Reports of Mumbai land sale incorrect: Jet Airways

Jet Airways is looking to sell two plots of 4 acres at the Bandra-Kurla Complex in Mumbai, reports CNBC-TV18's Priyanka Ghosh, quoting sources. However, reacting to these reports, a Jet Airways official said that the report of land sale in Mumbai is 'incorrect,' according to NewsWire18.
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Dec 12, 2008, 05.47 PM | Source: CNBC-TV18

Reports of Mumbai land sale incorrect: Jet Airways

Jet Airways is looking to sell two plots of 4 acres at the Bandra-Kurla Complex in Mumbai, reports CNBC-TV18's Priyanka Ghosh, quoting sources. However, reacting to these reports, a Jet Airways official said that the report of land sale in Mumbai is 'incorrect,' according to NewsWire18.

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Reports of Mumbai land sale incorrect: Jet Airways

Jet Airways is looking to sell two plots of 4 acres at the Bandra-Kurla Complex in Mumbai, reports CNBC-TV18's Priyanka Ghosh, quoting sources. However, reacting to these reports, a Jet Airways official said that the report of land sale in Mumbai is 'incorrect,' according to NewsWire18.

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Priyanka Ghosh (more)

Reporter, CNBC-TV18 |

Jet Airways is looking to sell two plots of 4 acres at the Bandra-Kurla Complex in Mumbai, reports CNBC-TV18's Priyanka Ghosh, quoting sources. Jet Airways will raise at least Rs 500 crore from the sale of the two plots. Jet had purchased one of these plots in 2007 and the other in 2006.

 

CNBC-TV18 contacted Jet but did not receive any response. However, reacting to these reports, a Jet Airways official said that the report of land sale in Mumbai is 'incorrect,' according to NewsWire18.

 

Jet Airways said, "There is no question of Jet Airways selling any properties. Jet Airways has already started work on its corporate office in the Bandra Kurla Complex. Jet Airways has been declared the highest bidder for a second property neighbouring this land. Jet Airways has not as yet signed the lease for this property and is considering various alternatives in view of the increased permissible built up area available in the New Headquarters property."

 

These parcels are about 1.5 acres and 2.5 acres in area. Jet had purchased C68 for Rs 28000 a sq ft for over Rs 300 crore and C8 at Rs 30000 a sq ft for over Rs 196 crore. And that price experts reckon is a high price; market conditions being very different in 2006 and 2007.

 

Both these plots have an additional 2 and 2.5 floor space index. That means developers can build more than double of the built up area. And today over and above the 2 and 2.5 floor space index (FSI), purchasing additional FSI is also possible at the cost of Rs 9-10,000 a sq feet. So sources say, even though no buyers have been confirmed yet, even in a market where valuations are down, with the additional possibility of tripling the built up area, Jet will be able to get its money back.

 

Experts also reckon this move has come from Jet Airways as a measure to bring in some cash flow. We have, of course, seen the company posting a loss of Rs 384 crore in Q2, pay cuts of as much as 25% being handed out to senior management as well a reduction in commission to travel agents.

 

CNBC-TV18 has learnt that Jet is unable to sign lease because of liquidity crunch. The 2.5 acre plot up for sale was purchased for more than Rs 300 crore. The deal is attractive due to additional FSI allowed in Bandra Kurla Complex but no buyer is confirmed as yet.

  

CNBC-TV18 Disclaimer:

 

This information has not been provided to the stock exchanges, and is source-based.

 

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Reports of Mumbai land sale incorrect: Jet Airways
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