Jet Airways shareholders approve Etihad deal

Jet Airways shareholders approve Etihad deal
Highlights

Jet Airways shareholders on Friday approved the sale of 24 per cent stake to Abu Dhabi-based Etihad, with the...

Jet Airways shareholders on Friday approved the sale of 24 per cent stake to Abu Dhabi-based Etihad, with the Indian carrier's Chairman Naresh Goyal saying that the deal will improve profitability, reduce costs and lower the debts.

At the airline's Extra Ordinary General Meeting (EGM), shareholders approved the proposed issue of shares on a preferential basis to Etihad. The shares will be allotted after the completion of all regulatory approvals.

However, the resolution to amend the Article of Association was deferred, apparently, following the market regulator Sebi and competition watchdog Competition Commission of India seeking more clarity on the deal.A Goyal said, that the airline has not yet received anything in writing from Sebi on the issue of AoA amendment. The deal is being looked into by CCI and Sebi besides other regulators.

Goyal said his strategic alliance with the Gulf carrier would improve Jet's profitability and bring down the costs.A "Etihad investment will help us to deleverage and grow in a sustainable manner," Goyal said, adding that "the commercial agreement with Etihad will help us to expand network, reduce costs and increase profitability".

As part of the deal, Etihad will acquire 24 per cent stake in Jet Airways for about `2,058 crore. The deal marks the first investment by a foreign carrier in an Indian airline since the change in the country's FDI policy last September. Both the companies have said that substantial ownership and effective control will remain with Indian nationals, with Goyal as non-executive Chairman, holding 51 per cent stake.

Deal brings down debt to $1.5 bn

Mumbai (PTI): Jet Airways said its 24 per cent stake sale to the gulf carrier Etihad will bring down its debt to $1.5 billion from the current $2.1 billion. "The deal will also help us bring down our current debt of $2.1 billion to 1.5 billion," Jet Airways Senior Vice-President for commercial finance and investor relations, KG Vishwanath told the company shareholders at an Extra Ordinary General Meeting convened to seek approval the stake sale deal with Etihad Airways.

Vishwanath said that of the total $2.1 billion debt, $700 million is on account of working capital which has been borrowed at high interest rates while the remaining $1.4 billion is aircraft-related loan.

Q4 net loss widens Mumbai (PTI): Jet Airways reported a net loss of `495.53 crore for the Q4 ended March 31, 2013 compared to loss of `298.12 crore in the same period year-ago. Total income from operations declined to `3,921.92 crore in the March quarter from `4,041.61 crore in the year ago period, Jet Airways said in a filing. For the full year ended March 31, 2013, the airline reported a net loss of `485.50 crore against `1,236.1 crore in the same period last year.

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