Mumbai: Putting an end to months of uncertainty, Etihad Airways has finally agreed to raise its stake in Jet Airways and has communicated the same to the beleaguered airline formally. The Abu Dhabi-based airline is said to have submitted an expression of interest (EoI) on Thursday, sources aware of the development said. Along with Etihad, private equity firms Think Equity and Redcliffe Capital, and government-backed National Infrastructure Investment Fund (NIIF) have also submitted EoIs to acquire a stake in the airline, sources added.
Etihad cannot own and control Jet on its own
It isn’t clear if Etihad is going to tie up with a partner. If it doesn’t, it can only raise its holding in Jet to 49 percent, the maximum that a foreign entity can hold in a domestic enterprise. India also does not permit foreign companies to effectively own and control an Indian enterprise.
Nonetheless, the development brings some respite for Jet’s lenders, who have been running from pole to pillar over the last few weeks to raise funds for the ailing airline. Jet’s lenders had been persuading Etihad to raise its stake in Jet from the current 24 percent. In March, the Abu Dhabi airline had told lenders that it would not raise its stake in the airline and wanted the banks to buy out its holding at Rs 150 per share.
The news came as Jet suspended all international flights from India on Thursday. The airline started the day with 14 airplanes by the end of the day, had lesser. It has discontinued most of its flights over the past few months to short-haul destinations.
Meanwhile, the government has said that it will investigate Jet Airways’ ability to keep flying, “review” the issues and “take necessary steps to minimise passenger inconvenience and ensure their safety.”