Millennium Post

Jet shareholders approve 24% stake sale to UAE’s national airline Etihad

Mumbai: Seeking shareholders' approval for sale of 24 per cent stake to Abu Dhabi-based Etihad, Jet Airways chairman Naresh Goyal on Friday said that this strategic alliance would improve the Indian carrier's profitability and lower the costs.
'Etihad investment will help us to deleverage and grow in a sustainable manner,' Goyal said here while addressing Jet Airway's shareholders at an extra ordinary general meeting (EGM) convened to seek their approval for the Etihad deal.
At the EGM, shareholders approved the proposed issue of shares on a preferential basis to Etihad. However, these shares would be allotted after completion of all regulatory approvals.
The deal is being looked into by Competition Commission of India (CCI) and Securities and Exchange Board of India (Sebi) among other regulators.
'The commercial agreement with Etihad will help us to expand network, reduce costs and increase profitability,' he added.
The company, however, deferred a proposal to amend its Article of Association, approval for which was also scheduled to be sought at  EGM on Friday.
Goyal said the resolution to amend the Article of Association would be taken up after getting necessary regulatory approvals for the deal. As part of the deal, Etihad would acquire 24 per cent stake in Jet Airways for about Rs 2,058 crore. The deal marks the first investment by a foreign carrier in an Indian airline since the change in the country's FDI policy last September.
Both the companies have said that substantial ownership and effective control will remain with Indian nationals, with Goyal as non-executive Chairman holding 51 per cent stake.
Jet had earlier said it was proposing to modify the existing Articles of Association to reflect the shareholders' agreement between its promoters and Etihad.
'Further, provisions have been added in the Articles of Association to further improve the standards of corporate governance of the company,' it had earlier said.
These amendments included Etihad-nominated directors on Jet board not being liable for any default or failure of the company in complying with the provisions of any
applicable laws. PTI
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