BackSebi relaxes requirements for Jet Airways
Airline allowed to sell shares through successive offers for sale without the 12-week gap
Premium(Abhijit Bhatlekar/Mint)
Mumbai: Jet Airways (India) Ltd, the country’s second largest airline by passengers carried, said on Tuesday the capital market regulator has allowed the company to sell shares through successive offers for sale without the 12-week gap required by the existing rules.
The company said in a stock exchange filing that the Securities and Exchange Board of India, or Sebi, has relaxed the cooling-off period requirement for Jet Airways to allow it to comply with the minimum public holding norms before the fast approaching deadline. All non-state, listed companies are required to have a minimum public shareholding of 25% before 4 June, according to a government directive dated 4 June 2010. State-owned companies have until August to have at least 10% public shareholding.
On 24 April, Etihad Airways PJSC agreed to acquire a 24% stake in Jet Airways for $379 million, setting the stage for the Mumbai-based airline to become the first beneficiary of a policy change that allowed foreign airlines to invest in domestic ones. Jet’s board approved the sale by way of a preferential allotment of 27 million shares to Etihad Airways at ₹ 754.74 apiece.
The deal will make Jet Airways the first Indian airline to take advantage of rules introduced by the government in September allowing a foreign airline to pick up a stake of as much as 49%. The Abu Dhabi-based national airline of the UAE will acquire shares by way of new stock and the dilution of promoter and founder chairman Naresh Goyal’s 80% holding, which will drop to 60.8%.
Following the deal, public shareholders will own 15.2% of Jet Airways. To meet the 25% norm, Jet Airways will first launch an offer for sale (OFS) of shares to lower the promoter’s holding. After the OFS, Goyal will hold a 51% stake, public shareholders 25% and Etihad 24%.
Jet Airways fell 0.55% to ₹ 574.15 on the BSE on Tuesday, while the benchmark Sensex rose 0.16% to 19,722.29 points.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
