India’s second-largest airlines Jet Airways has struck a deal with Etihad Airways by agreeing to sell 32 per cent stake to Abu Dhabi-based carrier.

New Delhi, April 24/Nationalturk – Jet Airways, India’s second-largest airlines, has struck a deal with Abu Dhabi’s national airlines Etihad Airways by agreeing to sell 27.3 million shares (32 per cent stake) to the Abu Dhabi-based carrier.

Sources said the deal was approved by Jet Airways Board held today. “The board decided that shares will be sold at Rs. 754.74 (INR) apiece on a preferential basis”.

They said number of Jet shares to be alloted to Etihad comprises nearly 32 percent of Indian carrier’s share capital.

Sources said following the deal, Jet Airways will shift one-third of its international operations to Abu Dhabi.

Etihad had been in talks to purchase 24 per cent equity stake in Jet Airways worth around $300 million.

First such deal in Indian aviation space

This is the first deal in the Indian aviation space ever since the government last September relaxed ownership rules and allowed foreign airlines to buy up to 49 per cent stake in Indian airlines.

Apart from selling 32 % stake to Etihad, Jet Airways is expected to sign an agreement to lease its Airbus 330 plane to Etihad, thereby raising additional funds that it could use to repay high-cost debt.

Earlier this year, the UAE airline purchased the Heathrow airport slots of Jet Airways for $70 million.

Jet Airways is also expected to get loans of about $300 million from the lenders of Etihad Airways at a 3% interest rate.

On 31 December 2012, Jet’s debt stood at $2.16 billion.

Aviation analysts welcomed the development and said it is good for aviation sector in India to internationalize the investor base. “It will also be beneficial for the travelers”.

Etihad Airways, which began operations in 2003, serves 86 cities in West Asia, Africa, Australia, Asia, Europe and North America, with a fleet of 70 Airbus and Boeing aircraft. It has at least 90 aircraft on firm order, including 10 Airbus A380s, the world’s largest passenger aircraft.

Jet Airways currently operates a fleet of 100 aircraft and flies to 73 destinations in India and at least 20 overseas.

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Faiz Ahmad / NationalTurk India News

 

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