Etihad due diligence on Naresh Goyal's Jet Airways seen within week: CEO
The Jet Airways deal would be the first foreign investment into India's aviation market after the government relaxed ownership rules in September last year and allowed foreign carriers to buy up to 49 percent in domestic carriers.
"We are doing our due diligence in the next week. We will present it to our board and take it from there," James Hogan, speaking at a press conference after the airline reported its annual results.
An announcement was expected this week, an official at the Indian airline, who declined to be identified, said in January.
Hogan said he had met with senior Indian aviation officials and ministers last week to understand the new rules of India's foreign direct investment scheme.
"We also wanted to understand the issues that have impacted Indian civil aviation, how they think this will change in the coming years," said Hogan.
The terms of the possible deal have not been disclosed, but a government source said earlier this month Etihad was in talks to pick up a 24-percent stake in Jet for up to $330 million.
Unlisted Etihad has been on an acquisition drive in recent months, taking minority equity stakes in Virgin Australia and Aer Lingus and raising its shareholding in Air Berlin and Air Seychelles.
Hogan said Etihad has no plans to cancel its order for Boeing's troubled 787 Dreamliner.
All 50 Boeing 787s remain grounded as authorities in the United States, Japan and France investigate the Boston battery fire and a separate battery failure that forced a second 787 to make an emergency landing in Japan a week later.
"(The) 787 is a great aircraft, we have no doubt it will be resolved and the aircraft will be up and fine," Hogan said.
When asked if Etihad would cancel any Boeing orders, he said: "Not at all."
Etihad, with a total of 41 787-9 Dreamliners on order and options for an additional 25 aircraft, would be one of the largest operator of the aircraft type in the world.
Hogan also said that the airline has had no discussions with Italian carrier Alitalia beyond code sharing.
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Etihad expects completion of Jet due diligence next week
(PTI) Etihad Airways, tipped to be acquiring stake in India's leading carrier Jet Airways, today said its Board is expected to take a decision on the matter once due diligence is completed next week.
Addressing a press conference here, Etihad Airways President & CEO James Hogan said the carrier, which reported 200 per cent jump in net profit for 2012 to USD 42 million, will present the due diligence report on Jet Airways to its board next week.
Subsequently, the board would consider the matter of picking up stake in the Indian carrier, he added.
Updating the progress made in Etihad's bid to be come the first foreign carrier to buy stake in an Indian airlines after the country's government allowed up to 49 per cent FDI in civil aviation last year, Hogan said he met senior aviation officials and ministers in India last week regarding the deal.
On January 31, Etihad delegation led by Hogan, and Jet Airways promoter Naresh Goyal had met Civil Aviation Minister Ajit Singh and Commerce Minister Anand Sharma in New Delhi.
The very next day, top brass of the two carriers also met Finance Minister P Chidambaram.
It has been speculated that Etihad is keen on picking up 24 per cent equity in Jet Airways valued at about Rs 1,800 crore. The two carriers are expected to clinch the deal soon and apply for FIPB clearance.
While the Abu Dhabi-based carrier could have a fair number of seats on the Jet Board, a new CEO, probably an Indian, could be appointed for Jet jointly by the management of the two airlines once the deal is implemented.
Goyal is likely to retain his position as Jet Chairman under the changes in the management structure that are being foreseen, according to various sources.
Besides expanding the equity base of the premier Indian carrier, a major reason for Goyal to dilute part of his shareholding in Jet from 80 per cent has been the FIPB order to bring it down to regulatory levels. Jet has an equity base of 8.63 crore shares, valued at Rs 5,370 crore.
At the end of the December quarter, M/S Tailwinds, Jet's promoter company owned by Goyal himself and incorporated in the Isle of Man, had 79.99 per cent stake, while Goyal had personal stake of 0.01 per cent.
Etihad has in the past two years picked up stake in several international carriers like Virgin Australia, airberlin, Air Seychelles and Aer Lingus.
When Etihad was set up in 2003, it had sought the help of the Naresh Goyal-owned carrier to set up its systems and Jet had given assistance with its specialists in various fields of aviation operations. Unconfirmed reports had then said Goyal had also invested money in the Gulf carrier.
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