Etihad set to pick 24% stake in Jet Airways

UAE Co Expected To Shell Out 2,200Cr Valuing Indian Carrier At Over 9,000Cr

New Delhi: Naresh Goyalowned Jet Airways is on the verge of becoming the first Indian carrier to benefit from the government's recent FDI policy change, allowing foreign carriers to invest in domestic airlines. Jet is in advanced stage of talks for a 24% stake sale to Middle East carrier Etihad Airways in a deal valued at $400 million (about Rs 2,200 crore). 
    Dayananidhi Maran's low-cost carrier SpiceJet has also admitted "that a few foreign airlines/investors have evinced interest" in it for picking up a stake. Three nonairline companies and two airlines are learnt to be in talks with SpiceJet at present but "a deal is not on the horizon". "It will be very premature to comment on the possibilities of any fresh equity issuance to such interested parties," an airline statement said. The scrips of both Jet and SpiceJet hit 52-week highs on BSE on Monday. Jet closed 10.8% higher at Rs 560 and SpiceJet closed almost 13% up at Rs 46.9. 
    "Jet Airways is in a massive expansion mode and needs capitalization. They are in advanced stage of talks with Etihad (an airline Goyal helped build by providing friendly technical expertise in its initial years as he has solid ties with Gulf carriers). This deal is expected to be clinched shortly unless Goyal or Etihad set up some impossible demand," said a top aviation source. 
    Jet is 80% owned by Goyal through the Isle of Man-registered Tailwinds. 
    UPA-II recently allowed foreign airlines to pick up to 49% stake in Indian carriers. Asked how Jet will offload stake to a foreign carrier in such a situation, the source said: "We have not been informed those details. Maybe Goyal dilutes his existing 80% by 15-20%. Anyway, the deal has to be routed through the foreign investment promotion board and they will look at that." 
    The Rs 2,200-crore for a 24% stake in Jet values Goyal's carrier at $1.7 billion (Rs 9,438 crore), a substantial premium from the current market capitalization of Rs 4,366 crore. A team of top Jet officials like chief commercial officer Sudheer Raghavan and chief operating officer Hamid Ali are learnt to be in Abu Dhabi to clinch the deal under Goyal's overall guidance.