Corporate Jan 31, 2013
Abu Dhabi's Etihad Airways is in talks with Jet Airways for a potential investment, civil aviation minister Ajit Singh said today, without giving any details of the possible deal.
"The government's role is to make sure that whatever agreement they come to is within the regulatory framework," he said after a meeting with Jet Chairman Naresh Goyal and Etihad Chief Executive James Hogan.
Singh reiterated that Jet will continue to be treated as a domestic airline and Etihad, as a foreign carrier. He said Etihad's flights into India and seats it offers now will continue to be governed by the ASA between the two countries.
To a question on whether Etihad would want to increase flights to Abu Dhabi from Indian cities and if the Government will relook at the ASA, Singh said "UAE doesn't only comprise Abu Dhabi .....we will then have to increase entitlements to Emirates too."
Singh declined to divulge details of the meeting, a first in which senior officials of both airlines were present, saying "we spoke of the weather in India and in Abu Dhabi ".
A CNBC-TV18 report said the two companies are likely to finalise the deal and sign the term sheet on 1 February. The announcement of the deal, at Rs 750-Rs 800 a share, may happen tomorrow.
Etihad is likely to pick up 24 percent stake in Jet in two tranches. As per the deal, Naresh Goyal will continue as chairman and promoter of Jet Airways. However the current board of directors will be expanded to include at l east three to four Etihad executives.
The deal will be the first since India relaxed ownership rules in September last year and allowed foreign investors to buy up to 49 percent in domestic carriers that are battling stiff competition and high operating costs.
With inputs from Reuters
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