>JET(CITI)

What's new? — Press reports (ET, Mint) indicate Jet is negotiating to sell a 10%
equity stake to Temasek Holdings for consideration of Rs2.5bn. The company
is also reportedly raising debt funds of Rs10bn from Abu Dhabi-based
Mubadala Development Corporation to help fund working capital requirements.

Management denies this development — Management has indicated these talks
are speculative, and that the company has no plans to infuse equity or debt
(from Mubadala). However, management has said that Jet plans to raise fresh
debt funds to meet its working capital requirements.

What are Jet's funding requirements? — We forecast Jet's cash losses at
Rs31.3bn (over FY09E-10E) (after interest payments, but before principal
repayments of c.US$280m). The company is trying to curb operational losses
through various initiatives – cutting loss-making flights, reducing ticket
commissions, etc. The biggest positive is the sharp fall in crude oil prices
(<$60 vs. our FY10/11 estimates of $75/bbl). If crude prices continue to
decline, there could be a substantial positive upside to our current numbers.

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