Jet Airways’s 24% stake sale deal with Etihad Airways today
“The government's role is to make sure that whatever agreement they come to is within the regulatory framework,” Singh told reporters after the meeting the Jet Airways and Etihad delegations.
“It's a very good move that Jet and Etihad are talking,” he added. “The government allowed foreign direct investment in aviation looking at the whole sector, their reach and technical expertise.”
The Etihad and Jet delegations also met commerce minister Sharma later in the day.
“We have put in place an enabling policy and any investment under the policy is welcome,” said Sharma after the meeting.
Sources said that the two airlines are still ironing out valuation issues but the deal could take place at anywhere between Rs 760 and Rs 800 per share, giving Jet Airways a valuation of anywhere between Rs 6,500 crore and Rs 6,900 crore as per the current outstanding shares.
On Thursday, the Jet share closed 4.34% higher on the BSE at Rs 622.70. As per Thursday's share price, Jet's market valuation stood at Rs 5,370 crore. The carrier made a loss of Rs 1,236.10 crore in 2011-12 on revenues of Rs 14,815.91 crore. In the second quarter of 2012-13, the carrier made a net loss of Rs 99.67 crore on net sales of Rs 3,755.28 crore.
Jet's losses have eroded its shareholder equity and the net debt stood at Rs 8,900 crore at the end September 2012 for the standalone entity. On a consolidated basis, the company has a total debt of Rs 12,000
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