Jet Airways said on Thursday that it was in
talks with Abu Dhabi's Etihad Airways for
a potential stake sale, although terms
have not been finalised yet.
The statement was the first confirmation
of a potential deal by either side, a day
after an Indian government source said
the Gulf carrier could pay up to USD 330
million for a 24 per cent stake in the
carrier.
Jet's shares surged as much as 6.4 per
cent on Thursday. The stock has risen 65
per cent since India relaxed rules allowing
foreign airlines to buy up to a 49 per cent
stake in local carriers in September.
"Various structures are being explored by
the legal and commercial teams," Jet said
in a statement to the Bombay Stock
Exchange, adding any structure would
comply with Indian rules.
The founder of Jet Airways is likely to
convert shares owned by its holding
company into his personal stake to
comply with foreign investment
regulations, a government source had
said.
Tail Winds Ltd, the Isle of Man-based
investment vehicle of Jet founder Naresh
Goyal, currently holds 79.99 per cent of
Jet Airways.
Etihad declined comment.
Etihad and Jet already have a code-
sharing agreement, and a tie-up could
make Jet a more formidable competitor
to state-owned Air India, while
strengthening Etihad's position against
Dubai-based Emirates Airline, which
carries a big chunk of the traffic between
India and the Middle East.
A deal between Jet and Etihad could shut
the door on grounded rival Kingfisher
Airlines, which is in desperate need of
cash to fly again and was in talks with
Etihad to sell a stake.
Etihad's decision to buy into Jet may be
announced in 10 days, the same source
quoted earlier said on Wednesday.
Etihad, which expanded globally through
stake purchases in the likes of Air Berlin
and Virgin Australia, is looking to extend
its geographical reach to India and other
Asian markets, its chief executive told
Reuters in October.
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