Shares of Jet Airways plunged 7.70 per cent to close at Rs 570.75 on the BSE on Monday on reports that the Abu Dhabi-based Etihad Airways is looking to revise the terms of the deal to buy a stake in the Indian carrier.

According to media reports, the Etihad Chairman Sheikh Hamed bin Zayed al-Nahayan said that it was too soon to say when a final agreement between the two carriers would be struck.

Etihad is governed by a board of directors under the chairmanship of Sheikh Hamed bin Zayed Al Nahyan.

If the deal gets through, this would be the first since India allowed foreign carriers to buy up to 49 per cent in domestic carriers, which are struggling with stiff competition and high operating costs.

Doubled in 10 months

Shares of Jet Airways have nearly doubled in value in the past 10 months to reach a high of Rs 622.10 in January. But in the past three weeks the shares slumped over nine per cent as the companies struggled to seal an agreement.

Aviation analysts say that one of the reasons may be due to Etihad’s interest in seeking 50 per cent board representation in Jet Airways. “The companies will need time for due diligence,” said Sharan Lillaney, aviation analyst, Angel Stock Broking.

In a recent report, the Centre for Asia Pacific Aviation had said Etihad was expected to acquire 24 per cent stake in Jet Airways, which could result in an inflow of $330 million into the Indian airline. The report valued Jet Airways at $1.3-1.4 billion (about Rs 7,000 crore). The current market cap of Jet Airways is about Rs 5,000 crore.

Meanwhile, a PTI report datelined Abu Dhabi quoted Anand Sharma, Commerce and Industry Minister, as saying: “I am given to understand that both the airlines are in negotiations and they are keen to build a partnership.”

>nivedita.ganguly@thehindu.co.in

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