New Delhi, Jan 31: The process of Etihad picking up 24 per cent equity in Jet Airways moved a step forward with top executives of both airlines meeting Commerce and Civil Aviation Ministers here today, as sources said the two carriers are likely to clinch the deal soon and apply for FIPB clearance.
Speculation was rife about the deal being firmed up in the next week to ten days, with sources saying the two airlines would thereafter put up an application on Jet's stake sale to the Abu Dhabi-based carrier for approval of the Foreign Investment Promotion Board (FIPB) of the Finance Ministry.
A meeting of the Jet Airways' Board is slated in Mumbai on Friday.
The Etihad delegation, led by its CEO James Hogan, and Jet Airways promoter Naresh Goyal met Civil Aviation Minister Ajit Singh and Commerce Minister Anand Sharma. Neither Hogan, nor Goyal spoke about the meetings.
Etihad is likely to buy 24 per cent equity in Jet Airways valued at about Rs 1,800 crore. If the deal is carried through, it would be the first investment by a foreign carrier in an Indian airline.
Besides expanding the equity base of the premier Indian carrier, a major reason for Goyal to dilute part of his shareholding in Jet from 80 per cent has been the FIPB order to bring it down to regulatory levels.
Jet Airways has an equity base of 8.63 crore shares, valued at Rs 5,325 crore. The shares were trading at Rs 616.9, up 3.47 per cent, on the BSE this afternoon.
At the end of the December quarter, M/S Tailwinds, Jet's promoter company owned by Goyal himself and incorporated in the Isle of Man, had 79.99 per cent stake, while Goyal had personal stake of 0.01 per cent.
An official release said the Jet-Etihad delegation briefed the Commerce Minister on their plans following the government's decision last September to allow foreign carriers to invest in their Indian counterparts.
"We have put in place an enabling policy and any investment under the policy is welcome," Anand Sharma said in his response.
The Minister would visit Abu Dhabi mid-February to attend the first meeting of the India-UAE High Level Task Force on Investment.
Speaking to reporters earlier, the Civil Aviation Minister said both airlines have been "in consultation (over stake sale). So the Etihad delegation was here today. They are discussing details with Goyal."
"Any foreign airline investing money has many concerns -- what's the policy, what's the cost structure (so that) you make money out of that. They have been discussing this deal for over a month. Since the government allowed FDI (by airlines), talks have been going on," Singh said.
He said whatever agreement was arrived at between the two carriers "should be within the regulatory framework. ... Once they sign the agreement, they will go through the regulatory requirements. Unless the deal is signed and approved, we can't say it is done. But I don't see any problems."
Earlier this month, Jet had informed the Bombay Stock Exchange that it was in talks with Etihad "regarding a potential investment...The discussions are in progress but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams."
Etihad has in the past two years picked up stake in several international carriers like Virgin Australia, airberlin, Air Seychelles and Aer Lingus.
When Etihad was set up in 2003, it had sought the help of the Naresh Goyal-owned carrier to set up its systems and Jet had given assistance with its specialists in various fields of aviation operations. Unconfirmed reports had then said Goyal had also invested money in the Gulf carrier.
