New Delhi: Jet Airways (India) Ltd’s promoter Naresh Goyal and an Etihad Airways PJSC board member will be part of a group that will meet aviation minister Ajit Singh on Thursday to discuss the Abu Dhabi-based airline’s investment in India, in a sign that the deal is about to go through.
The airline plans to acquire about 24% of Jet Airways and discussions are close to conclusion, according to a ministry official who declined to be named.
The Etihad board member Ahmed Ali Al Sayegh will be accompanied by the airline’s general counsel and executive vice-president, legal, James Callaghan, and chief strategy and planning officer Kevin Knight. They will meet Singh on 31 January to discuss Eithad’s investment in Jet Airways, the same ministry official said.
The board of the United Arab Emirates national airline is headed by Sheikh Hamed bin Zayed Al Nahyan and has seven independent non-executive members. Sayegh is one of the seven.
The high-level nature of the delegation that included the general counsel shows the structure of the deal may be the focus of discussions with Singh, said the official cited above.
“They have agreed among themselves and now would like to know our stand from a government policy perspective, before making a formal public announcement. The Etihad board had met on 16th and owners were informed of the potential Jet investment structure,” this ministry official said.
The early morning meeting was sought a week ago and could also see one or two more people attending, this official said.
Jet did not offer any comment. A spokesman for Etihad couldn’t be reached immediately.
Jet has a complicated shareholding structure.
When Jet confirmed it was in talks with Etihad on 3 January, it added the caveat that any deal would require the resolution of such issues. “Various structures are being explored by legal and commercial teams, and care is being taken to ensure all Indian regulatory requirements are fully complied (with),” Jet told BSE at the time.
Naresh Goyal controls Jet from the Isle of Man tax haven through Tailwinds Pvt. Ltd.
Tailwinds controls 80% of Jet and is an overseas corporate body. As per rules, Jet is, therefore, already more than 49% controlled by a foreign holding firm but has been granted special exemption by the government. The government allows overseas investment of up to 49% in airlines. In September, it said such stakes could also be picked up by foreign airlines.
Jet will, therefore, need to tweak its ownership structure to meet Indian regulations.
The ministry official said once Etihad has clarity from the government of India, it will approach the Foreign Investment Promotion Board, or FIPB, officially to apply for investment permission.
The Etihad-Jet delegation is also scheduled to meet commerce minister Anand Sharma. FIPB comes under Sharma’s jurisdiction.
Etihad hopes to make Jet a strategic partner, which will include shifting Jet’s European base from Brussels to Abu Dhabi, this ministry official said, even as Air India chairman and managing director Rohit Nandan has raised concerns over the potential threat to the Indian flag carrier from such a deal, in a letter to aviation secretary K.N. Srivastava, Mint reported on 10 January.
Jet Airways ended at Rs.590.55 a share, down 1.94%, on the BSE on Tuesday. The Sensex shed 0.56% to 19,990.90 points.