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All you need to know about Jet-Etihad deal

Jet Airways today approves 24% preferencial share allotment to Etihad

Aneesh Phadnis  |  Mumbai 

today approved the much awaited 24% preferencial to Airways. The deal has been going back and forth for sometime now. also approved the induction of CEO and CFO on its board.

We bring to you the timeline and the nuts and bolts of the deal:


April 24 - and sign strategic alliance. agrees to pick up 24 percent stake in for about Rs 2060 crore
 
May 24 - share holders approve sale of stake to The airline defers resolutions to amend company's articles of association
May 27 - The two airlines amend shareholder agreement to address shareholder and Sebi concerns on control and ownership
May 29 and 31  - Subramanian Swamy and Jaswant Singh  complain to Prime Minister against the deal
June 13 - PMO writes to civil aviation ministry to redraft the cabinet note on Abu Dhabi traffic rights 
June 14 - Foreign Investment Promotion Board defers approval to Jet-alliance 
July 2 - PMO defends the Abu Dhabi bilaterals, says there is no division in government on the issue
July 29 - FIPB gives a conditional approval to Jet-deal
Sept 3 - Cabinet approves the enhanced traffic rights on India-Abu Dhabi route
Sept 16 - Swamy files a petition in Supreme Court against the deal, demands CBI probe
Sept 25 - Sebi writes to Swamy, says the agreement does not trigger will not trigger an open offer
Oct 3 - Cabinet Committee of Economic Affairs clears the deal
Nov 12 - Competition Commission of India gives its clearance to the deal

As part of the deal, there will be an overall cash infusion of $ 750 million in debt and equity. The infusion will help Jet cut its debt from $2.1 billion to $ 1.5 billion
$379 million Equity investment
$150 million Investment in Jet’s frequent-flyer programme
$150-million loan Assistance to be provided in securing debt
$70 million Sale and lease-back of Jet’s Heathrow slots


Strategic investment under FDI policy of the Government of India will deliver wide-ranging revenue growth and cost synegy opportunities for both airlines
Alliance will bring significant benefits to the Indian economy, both in terms of growth, job creation, trade and tourism    
passengers from 23 cities in India to gain direct access to an expanded global network
to enhance its services from its primary hubs of Delhi and Mumbai, and introduce new flights from Hyderabad and Bangalore
The strategic alliance between the two airlines will bring additional traffic, frequencies and revenues to metro airports, as well as other airports of AAI
New India-Abu Dhabi routes and to establish a Gulf gateway for flights to the US, Europe, Africa and the Middle East
The strategic investment enables Airways to tap into India’s fast-growing 42 million strong travel market
Both airlines' passengers will benefit from fully integrated frequent flyer programs with reciprocal ‘earn-and-burn’
Alliance will result in both consumer benefits and/or all round efficiencies
This strategic investment with a US$600 million commitment from Airways will help further strengthening of financial position.

FDI investments in aviation after the government relaxed rules in 2012

Jet - deal  - $379 million. will hold 24%. Jet chairman Naresh Goyal retains 51%. Public shareholding - 25%
 
Tata Singapore Airlines - Initital investment $100 million. Singapore Airlines will invest $49 million and the balance will be invested by Tata group
 
Tata AirAsia - AirAsia to hold 49% investment, Tata Group will hold 30% while 21% will be held by telestra Tradeplace. The initial investment is around Rs 80 crore

First Published: Wed, November 20 2013. 13:03 IST
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