Jet Airways will sell a 24 per cent stake to Abu
Dhabi-based Etihad for $ 379 million (approx Rs 2,046 crore). As part of the
Jet-Etihad deal announced on Wednesday, Etihad will invest $ 220 million
(approx Rs 1,190 crore) in Jet to create and strengthen a wide-ranging
partnership. This will include $ 150 million (approx Rs 810 crore) as majority
equity investment in Jet Airways's frequent flyer program Jet Privilege, and $
70 million (Rs 378 crore) towards three pairs of slots at Heathrow through a
sale and lease back agreement, Jet said in a statement.
After the deal, the promoters' stake in Jet is expected
to come down from around 80 per cent to 60 per cent.
Jet informed BSE that it was in talks with Etihad on
January 3 — the first such deal after the government allowed foreign carriers to
buy stake in Indian airline companies in September 2012. Before the deal,
officials from Etihad and the Indian civil aviation ministry met to sort out
issues like bilateral rights. The deal will give Etihad access to a huge market
that has potential to grow at 7-8 per cent for the next decade. Jet will get
capital, expertise and access to Etihad's global network and base in Abu Dhabi.
Jet plans to connect 23 Indian cities to the world
through Abu Dhabi, which will be its new international hub. It will also keep
its other hub in Brussels.
"The airlines will explore joint purchasing
opportunities for fuel, spare parts, equipment and catering supplies, as well
as external services such as insurance and technology support. Other areas of
co-operation will include joint training of pilots, cabin crew and engineers,
as well as maintenance of common aircraft types and the consolidation of guest
loyalty programs," the Jet Airways release said.
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