shifted the revenue management and network operations offices of Jet Airways to Abu Dhabi. Instead, the two airlines would open ‘centres for excellence’ in the two countries to enable employees to learn global best practices.
Etihad’s views on management appointments would be recommendatory as per the revised agreement. The Abu Dhabi-based airline will also not have the right to appoint independent members on the nomination and audit committees of Jet’s board and Etihad’s members can only be appointed to the two committees if they are nominated by the board.
“Sebi has already cleared the deal, the civil aviation ministry’s concerns have been resolved and even the corporate affairs ministry was looking into the deal. We have followed all proper procedures,” civil aviation minister Ajit Singh said after the deal was cleared by the FIPB.
“The deal is good for the passengers and the civil aviation sector. We require a lot of foreign investment on our infrastructure side. The deal will also reaffirm investor confidence in the India growth story,” he said.
Monday’s conditional approval came after Jet-Etihad submitted a revised proposal to the government which assured that the control of the company would remain in Indian hands as envisaged in the policy on aviation FDI.
On April 24, Jet Airways and Etihad had agreed on a deal as per which the Abu Dhabi-based airline was to invest Rs 2,058 crore to pick up 24% stake in the Goyal-promoted airline. The deal was to be done via a preferential issue of shares to Etihad at Rs 754.53 per share. As part of the deal, Tail Winds, the former holding company of Jet Airways, would sell stake to Naresh Goyal. Naresh Goyal held 100% stake in Tail Winds, which was registered in Isle of Man.
The deal ran into hurdles with market regulator Securities and Exchange Board of India seeking changes to the shareholders’ agreement in May to ensure ‘effective control’ of Jet doesn’t slip into Etihad’s hands. The deal was subsequently reworked; still the FIPB deferred giving clearance to the proposal at its meeting on June 14.
Jet and Etihad yet again reworked