Etihad Airways has completed a deal to purchase 24 per cent stake in Jet Airways seven months after the transaction was first announced.
The $335 million deal, which was unveiled in April, is the first cross border transaction in the Indian aviation sector after it was opened up for foreign direct investments last year.
In a regulatory filing, the Mumbai-based Jet said that its board of directors has approved the issue and allotment of 27,263,372 equity shares at a price of Rs 754.74 per share on a preferential basis to the Abu-Dhabi based carrier.
Etihad President and CEO James Hogan and Chief Financial Officer James Rigney have been appointed as additional directors at Jet. Victoriano Dungca, who has been a Director since 1999, has resigned from the Jet board.
Mr. Naresh Goyal, Chairman of Jet Airways said: “The infusion of foreign direct investment in the aviation sector will result in economies of scale, grow traffic at our airports, and create job opportunities. I am confident that this investment will greatly benefit all our stakeholders whilst significantly benefiting our customers who will now have access to a more expanded global network.”
In a separate communication, Jet Airways said that its board has also approved the slump sale of its frequent flyer business to its subsidiary, Jet Privilege. Both Jet and Etihad would make equity investment in Jet Privilege following which Etihad will own 50.1 per cent of the company with Jet owning the remaining shares.
While both airlines would begin collaborating immediately, specific details will be released progressively, the two companies said.