Jet Airways has approached Temasek Holdings, the Singapore government-owned firm, for talks on selling a part of its equity. Informed sources say Jet has offered 30-40 per cent stake in the company.

Saroj K Datta, Jet's executive director, said in a faxed reply on the issue: "Discussions have been held with various parties about the possibility of private placement and equity investment in Jet Airways. Various proposals and possibilities have been discussed but no definitive decision or conclusion had been reached as yet."

A Temasek Holdings spokesperson in Singapore said: "We are open to opportunities which make commercial sense." According to current policy, private domestic airlines can have up to 40 per cent foreign equity participation.

Foreign financial institutions and other entities, which seek to hold equity in the domestic aviation sector, cannot have foreign airlines as their shareholder. Also, any foreign institution that seeks to make an investment cannot be a subsidiary of a foreign airline.

Though the policy specifically bars foreign airlines from equity participation, aviation ministry sources say Temasek, which owns a majority stake in Singapore International Airlines, will not be affected. This is because Temasek is only a holding company for SIA.

Other industry sources, however, said Temasek cannot be allowed to hold stake in Jet under the existing policy.

Jet Airways would need fresh funds to expand its fleet within the country. Besides, it needs more aircraft if it gets clearances for flying internationally to routes in the US, Gulf, south-east Asia and Europe. Experts reckon that Jet would require about half to one billion dollars for its international operations.

Datta said Jet Airways had clocked losses in 2001-2 and in 2002-3 because of adverse market situation.

However, in the last financial year, the airline had been able to achieve a turnaround. And the airline was interested in exploring and taking advantage of opportunities for international expansion as part of its long term strategy, he said.

Temasek had made an aborted bid a few years ago to set up a domestic airline company with the Tata group. In India, it has invested or committed investment of over $400 million.

The company has picked up over 9.26 per cent stake in ICICI bank for $250 million. It has also invested about $60 million in pharmaceuticals companies such as Matrix Laboratories and Aurobindo Pharma.

It also recently made a bid to acquire the AT&T stake in Idea Cellular (it controls a stake in Bharti indirectly as it has a majority stake in Singtel).