Jet Airways of India would be selling its minority shareholdings to Etihad Airways for the price of US$379 million. After months of negotiations, the sale to the fast growng Abu Dhabi based air carrier would give a boost to the beleaguered Indian aviation market.
The investment would be the first one made by an overseas air carrier in an Indian air carrier ever since the country opened ownership rules last September. The new rules now allow foreign carriers to purchase up to 49% in Indian airlines, which is a market thick with competition and above average operating costs.
The purchase would allow Etihad a foothold into the Indian market and provide the largest air carrier a partner flush with finances that can help pay off existing debts amounting to US$2.1 billion by December's end.
The majority shareholder in Jet is Indian entrepreneur Naresh Goyal. From his London base, Goyal issued a statement to the Indian stock exchange authorities that Jet's board had already approved the issuance of 27.3 million shares costing 754.74 rupees to Jet on a preferential basis.
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