Jet may issue fresh shares to Etihad in stake sale
and the promoters could seek an exemption from the government.
A sale of any of Tail Wind’s stake now will instead trigger a tax demand. Even if the shares are transferred to Naresh Goyal before Etihad buys them, the tax demand would remain valid.
Emails sent to Jet Airways and Etihad on this issue on Wednesday did not elicit any response.
Tail Winds Ltd had declared its stake in Jet as an overseas corporate body. But in September 2003 these bodies were merged under the umbrella of foreign investment. Jet, like several other companies, was given time to reduce its investment from Tail Winds to less than 49 per cent by 2013, under a ten year extension of the deadline.
The issue of the extension of deadline to bring down the foreign stake in the airline was also discussed in the meeting Jet Airways and Etihad had with civil aviation minister Ajit Singh and commerce minister Anand Sharma on Thursday and Finance Minister P Chidambaram today.
“If the transfer of shares of an Indian company will be made by an erstwhile OCB to an NRI, it will require compliance with the foreign exchange regulations/guidelines,” said Lalit Kumar, partner, J Sagar Associates. Currently, Tail Winds owns 79.99 per cent in Jet Airways. Naresh Goyal, in his personal capacity, owns only 0.01 per cent in the company. Jet Airways shares closed at Rs 622.65 a piece, up 0.09 per cent, on the BSE on Friday.
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