Jet-Etihad deal meets fresh troubles in the sky

Jet-Etihad deal meets fresh troubles in the sky
As the Jet-Etihad deal struggles to get through even after four months of announcement, troubles are refusing to end yet. The Rs 2,060 crore deal, aimed at selling 24 per cent stake in the Jet to Abu Dhabi-based Etihad Airways, has now hit the barriers of market regulator Sebi and the Department of Industrial Policy & Promotion (DIPP).

The two companies were asked to submit the revised shareholders' agreement with DIPP and FIPB, which is scheduled to discuss on Monday about the same. But, before that, DIPP has already raised objections on the revised document saying that it sounds the same as submitted earlier.

According to a Business Standard report, Sebi has also expressed concerns over the deal saying that commercial cooperation agreement (CCA) to be signed between the two airlines may lead to transfer of 'control' in the Indian carrier to foreign hands. Experts believe that Sebi's objection is the biggest hurdle now as if CCA is not entered, then the deal might fall apart.

The CCA, one of the conditions placed by Etihad for buying stake in debt-ridden Indian airline, says that Abu Dhabi based player could source candidates for senior management positions after the acquisition of stake and Jet will also exit from existing code-share arrangements with third parties on routes where Etihad or its affiliates operate.

Read more about: jet airways india
Story first published: Friday, July 26, 2013, 9:22 [IST]
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