: Jet Airways owner Naresh Goyal will rejig the shareholding structure to accommodate his proposed new partner, Etihad Airways. Goyal's Tail Winds, which holds almost 80% of Jet Airways, will transfer a majority of its stake to the founder and will divest a 5% stake to meet Sebi's 25% public float requirements, Jet Airways said in a statement to the stock exchange.
To comply with the Sebi norms, Tail Winds, an overseas corporate body (OCB) registered in the tax haven of Isle of Man, will seek RBI and FIPB approval. The permission is important as India has derecognized OCBs as a separate class of investor since 2003. And so, these entities can't sell or purchase shares or convertible debentures but could hold such securities and debt instruments if the same were bought before the new rule came into force. The share transfer is expected to have no tax implications as there is no sale taking place between Tail Winds and Goyal, said industry observers.Jet Airways didn't mention the time-frame for selling the additional shares to public but Sebi has set a June-end deadline for complying with the public shareholding norms. Funds and other investors currently hold a 20% stake in Jet Airways, whose shares on Monday closed at Rs 609.60 on the BSE. At this price, the additional 5% stake is worth about Rs 265 crore.
Tail Winds will divest 5% through offer-for-sale , the preferred route of companies to meet the public shareholding guidelines. India's second largest carrier by market share has called for a shareholders meeting on May 24 to seek their approval on Etihad's proposed Rs 2,058 crore investment in Jet Airways, which would give the Abu Dhabi carrier a 24% stake in the over two-decade old firm. The deal with Etihad will take place after the divestment and share transfer exercise. Jet intends to use the money to repay high cost debt and improve its earnings.
Etihad will get three seats on the board of Jet Airways and the stake purchase by UAE's national airline will not result in a change of control of the company, the Mumbai-based carrier said. It is learned that Etihad will not have any veto rights.
Once the entire transaction is over, Tail Winds will no longer hold any shares in Jet Airways and that Goyal will hold controlling stake of 51% in the company, the Jet Airways statement said.
Conforming to norms
Naresh Goyal's Tail Winds is an overseas corporate body (OCB) registered in the tax haven of Isle of Man.
It will transfer most of the 80% stake in Jet Airways to the founder and will divest 5% after taking RBI & FIPB's approvals The clearance is vital as OCBs were derecognized as an investor class in 2003, so they can't buy/sell shares unless they're held before that date.
http://timesofindia.indiatimes.com/business/india-business/Naresh-Goyal-rejigs-Jet-holding-structure/articleshow/19793855.cms
To comply with the Sebi norms, Tail Winds, an overseas corporate body (OCB) registered in the tax haven of Isle of Man, will seek RBI and FIPB approval. The permission is important as India has derecognized OCBs as a separate class of investor since 2003. And so, these entities can't sell or purchase shares or convertible debentures but could hold such securities and debt instruments if the same were bought before the new rule came into force. The share transfer is expected to have no tax implications as there is no sale taking place between Tail Winds and Goyal, said industry observers.Jet Airways didn't mention the time-frame for selling the additional shares to public but Sebi has set a June-end deadline for complying with the public shareholding norms. Funds and other investors currently hold a 20% stake in Jet Airways, whose shares on Monday closed at Rs 609.60 on the BSE. At this price, the additional 5% stake is worth about Rs 265 crore.
Tail Winds will divest 5% through offer-for-sale , the preferred route of companies to meet the public shareholding guidelines. India's second largest carrier by market share has called for a shareholders meeting on May 24 to seek their approval on Etihad's proposed Rs 2,058 crore investment in Jet Airways, which would give the Abu Dhabi carrier a 24% stake in the over two-decade old firm. The deal with Etihad will take place after the divestment and share transfer exercise. Jet intends to use the money to repay high cost debt and improve its earnings.
Etihad will get three seats on the board of Jet Airways and the stake purchase by UAE's national airline will not result in a change of control of the company, the Mumbai-based carrier said. It is learned that Etihad will not have any veto rights.
Once the entire transaction is over, Tail Winds will no longer hold any shares in Jet Airways and that Goyal will hold controlling stake of 51% in the company, the Jet Airways statement said.
Conforming to norms
Naresh Goyal's Tail Winds is an overseas corporate body (OCB) registered in the tax haven of Isle of Man.
It will transfer most of the 80% stake in Jet Airways to the founder and will divest 5% after taking RBI & FIPB's approvals The clearance is vital as OCBs were derecognized as an investor class in 2003, so they can't buy/sell shares unless they're held before that date.
http://timesofindia.indiatimes.com/business/india-business/Naresh-Goyal-rejigs-Jet-holding-structure/articleshow/19793855.cms
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