Naresh Goyal-promoted Jet Airways and Abu Dhabi?s Etihad Airways have agreed to the conditions put forward by the Foreign Investment Promotion Board (FIPB) and are expected to submit the reworked shareholders? agreement to market regulator Securities and Exchange Board of India (Sebi) early next week.
The two airlines have extended the deadline to close the transaction to August 31 and hope to complete the deal with all requisite approvals in place by then.
Earlier this week, the FIPB approved the proposed deal between the airlines wherein Etihad will invest R2,058 crore to purchase a 24% stake in Jet Airways. The purchase was to be made through a preferential issue of shares at R754.73.
The approval was given with certain riders which required Jet Airways and Etihad to make certain changes in the shareholders? pact in sync with the riders. For instance, FIPB asked Jet Airways and Etihad to ensure that the Articles of Association of Jet Airways should override the shareholders agreement. The FIPB was also of the view that shareholders disputes should be governed under Indian law .
?The conditions have been agreed and a revised shareholder agreement reflecting these changes will be submitted to the Sebi for approval early next week,? said a person in the know of the development. ?We hope that the deal will be cleared before the ?long-stop? date of August 31.?
Earlier last month, Jet and Etihad revised the ?long-stop? date or the deadline for deal closure to August 31 after it was clear that regulatory approvals won?t be in place before July 31, the original long-stop date.
Meanwhile, Etihad chief executive officer James Hogan also expressed confidence that the deal would be completed before August 31.
After getting the approval from Sebi, Jet-Etihad?s investment proposal will be taken up by the cabinet committee on economic affairs. The deal is also being currently vetted by the fair trade regulator Competition Commission of India.
