CCEA approves Jet-Etihad deal
The Cabinet Committee on Economic Affairs (CCEA) gave clearance to Jet Airways proposed sale of 24% equity to Abu Dhabi-based Etihad Airways, setting stage for the biggest ever foreign investment in the Indian aviation sector.
The deal is important to Jet, which is facing significant financial challenges, as it brings an equity capital of Rs 2057.66 crore. The deal will also help the Indian civil aviation industry by enhancing capacity, increasing competition and bringing down airfares.
The deal has already received clearance from the Foreign Investment Promotion Board (FIPB) and the markets regulator SEBI. The clearance was given after both parties to the deal brought significant changes in the Shareholders’ Agreement (SHA) and Commercial Co-operation Agreement (CCA) after SEBI and FIPB raised doubts that the deal might give an upper hand to Etihad in the matters of control of the company. Indian government wanted to ensure that the ownership and major control of the company remained with Jet Airways.