STATESMAN NEWS SERVICE
New Delhi, 1 October
Paving the way for Jet Airways’ proposed sale of 24 per cent stake to Abu Dhabi-based Etihad, market regulator the Securities and Exchange Board of India has opined that the deal in its revised form does not give controlling powers to the foreign carrier and is in compliance with the regulations.
After studying the revised structure, the Sebi has observed that the Rs 2058-crore deal should not trigger a mandatory open offer for purchase of shares from public shareholders and Etihad would not be considered a promoter entity in Jet Airways.
However, the Sebi has left it to the government to take a final call on the revised Commercial Cooperation Agreement (CCA) proposed by Jet and Etihad Airways, sources said, while adding that these observations have been issued as per the given facts about the proposed deal.
The deal was announced in April and has been stuck due to objections from regulators, including the Sebi and the Competition Commission of India (CCI), as also other agencies, as it was deemed to yield significant control of the airline to Etihad. The Foreign Investment Promotion Board (FIPB) approved the deal in July with some conditions after both parties assured it that "effective control" would remain with local promoters.
The proposal will now be considered by the Cabinet Committee on Economic Affairs. The CCI had also sought changes in the original deal. The two parties had informed the fair trade regulator about the changes in the deal and approval from the CCI is expected soon.