Jet-Etihad Airways Deal Moves Forward

The process of Etihad picking up 24 per cent equity in Jet Airways moved a step forward with top executives of both airlines meeting Commerce and Civil Aviation Ministers here today, as sources said the two carriers are likely to clinch the deal soon and apply for FIPB clearance.

Speculation was rife about the deal being firmed up in the next week to ten days, with sources saying the two airlines would thereafter put up an application on Jet's stake sale to the Abu Dhabi-based carrier for approval of the Foreign Investment Promotion Board (FIPB) of the Finance Ministry.

A meeting of the Jet Airways' Board is slated in Mumbai tomorrow.

The Etihad delegation, led by its CEO James Hogan, and Jet Airways promoter Naresh Goyal met Civil Aviation Minister Ajit Singh and Commerce Minister Anand Sharma. Neither Hogan, nor Goyal spoke about the meetings.

Etihad is likely to buy 24 per cent equity in Jet Airways valued at about Rs 1,800 crore. If the deal is carried through, it would be the first investment by a foreign carrier in an Indian airline.

Besides expanding the equity base of the premier Indian carrier, a major reason for Goyal to dilute part of his shareholding in Jet from 80 per cent has been the FIPB order to bring it down to regulatory levels.

Jet Airways has an equity base of 8.63 crore shares, valued at Rs 5,370 crore. The shares closed at Rs 622.10, up 4.34 per cent, on the BSE.

At the end of the December quarter, M/S Tailwinds, Jet's promoter company owned by Goyal himself and incorporated in the Isle of Man, had 79.99 per cent stake, while Goyal had personal stake of 0.01 per cent.