Etihad due diligence on Naresh Goyal's Jet Airways seen within week: CEO

Feb 04 2013, 17:30 IST
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Etihad Airways is in talks to pick up a 24-percent stake in Jet Airways for up to $330 million. Etihad Airways is in talks to pick up a 24-percent stake in Jet Airways for up to $330 million.
SummaryEtihad Airways was in talks to pick up a 24-percent stake in Jet Airways for up to $330 million.

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

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