Jet Airways and Etihad have given themselves one more month to complete the deal, wherein Jet will sell a part of its stake to the Abu Dhabi-based carrier. The two were to have completed the deal by end-August but extended the deadline to end-September as regulatory approvals are still to come in.
A statement from Etihad Airways’ headquarters says: “We have agreed to extend the long-stop date till the end of September as we continue to work through the details to finalise the regulatory process.”
This is the second successive extension that the two sides have agreed to since April when Jet Airways agreed to sell a 24 per cent stake for about Rs 2,050 crore.
The two sides were initially supposed to complete the deal by the end of July.
The deal ran into trouble with both the Securities and Exchange Board of India and the Foreign Investment Promotion Board raising questions. SEBI felt Etihad was getting a higher representation on the board of Jet Airways, a listed company, than its holding entitled it to. Also, the Government wanted Jet Airways to ensure that the place of doing business will not shift from India after the deal was concluded.
Jet and Etihad revised their shareholders agreement providing two seats on the board to Etihad’s nominees and assured the Government that the place of business will remain in India before FIPB clearance was given.
On July 29 this year, FIPB gave its nod for the deal but put in three riders — Indian, not English, law must prevail in case of any dispute between the two airlines; Jet and Etihad must amend the Articles of Association to bring it in sync with the revised shareholders’ agreement; and Jet will have to seek Government approval before making any changes to the shareholders’ agreement with Etihad or any change in the shareholding of the company.
Jet shares closed at Rs 291.85, down 1.07 per cent on the BSE on Friday.