Etihad Airways sees clearance for $600mn Jet deal, extends deadline

Reuters/Dubai

Etihad Airways expects a $600mn investment in Jet Airways to be cleared by Indian authorities imminently, as it further extended a deadline for regulatory approval that ended on Aug 31, the Abu Dhabi carrier said yesterday.

Etihad’s plan to buy a 24% stake in Jet had been delayed by regulators and by concerns from some politicians an April bilateral accord on air services between India and the UAE was hurting Indian airlines’ interests.

A potential stake purchase would be the first by an overseas operator in an Indian airline since ownership rules were relaxed and provides India’s largest carrier with a deep-pocketed global partner as well as cash to pay down debt.

Etihad confirmed that it agreed to extend a deadline for the deal to win regulatory approvals for a second time until end of September.

The deadline had been extended by a month in August.

“The revised agreements are expected to be endorsed by the Competition Commission of India and the Indian Government imminently,” Etihad said in an emailed statement, its first comments after the deal hit snags with the Indian authorities.

The Gulf airline said its chief executive James Hogan met Jet chairman Naresh Goyal in Mumbai this weekend to “review progress on the finalisation” of the deal.

“We are working very closely with the Indian Government and regulatory authorities to ensure we meet all the requirements of the new foreign direct investment legislation,” James Hogan said in the statement.

The airlines won conditional approval from India’s foreign investment regulator in July but it still needed clearance from the capital markets regulator and a ministerial investment panel.

Opposition politicians have also objected to the deal on grounds that the bilateral accord between India and the UAE increasing the number of airline seats per week favoured Etihad more than Indian carriers.

Indian authorities are yet to say when the deal will be sent to a cabinet panel for the final approval. Authorities could not be contacted yesterday as it is a public holiday.

Etihad agreed to pay $379mn for a 24% stake in Jet in April. It also invested an additional $150mn in Jet’s frequent flyer programme and spent $70mn to buy Jet’s three pairs of Heathrow slots through a sale and leaseback agreement.