FinMin to take up Jet-Etihad deal for approval on June 11
The Finance Ministry will take up Jet Airways' proposal to induct foreign capital by selling 24 per cent stake to Abu Dhabi-based Etihad for about Rs. 2,058 crore on June 11.india Updated: May 30, 2013 15:36 IST
The Finance Ministry will take up Jet Airways' proposal to induct foreign capital by selling 24% stake to Abu Dhabi-based Etihad for about Rs. 2,058 crore on June 11.
The proposal is listed in the agenda of the next meeting of the Foreign Investment Promotion Board (FIPB), which clears FDI proposals in certain sensitive sectors, said sources.
Once the proposal is approved by the FIPB, it will go to the Cabinet Committee on Economic Affairs (CCEA) for final clearance as the deal size exceeds Rs. 1,200 crore.
Meanwhile, market regulator Sebi and competition watchdog CCI have sought clarity from the domestic carrier on the transaction, to ensure that Etihad's ownership powers in Jet remains in line with its 24% stake in the company's equity capital.
Sources said the regulator may suggest certain changes, or at least an additional disclaimer by the two parties involved in the deal to ensure compliance with the FDI norms on ownership.
This is the largest foreign investment proposal in the aviation sector after the government allowed foreign carriers to pick up stake in domestic airlines in September last year.
In March, the FIPB had cleared the Rs. 81 crore investment proposal of AirAsia to set up a JV airline company with Tata Sons and another partner.
Shares of Jet Airways were trading at Rs. 531.65 apiece, down 0.64% on the BSE.
Last week, shareholders of Jet Airways had given their approval for the proposed deal.