Jet Airways’ board of directors has given its approval for the sale of a 24% stake in the carrier to Abu Dhabi-based Etihad in a $379 million deal that is set to revolutionize the Indian aviation sector.
The price agreed by Etihad reportedly represents a premium of more than 30% above Jet Airways’ current stock value.
The deal is the first overseas investment in an Indian airline since regulations relating to foreign ownership were relaxed in 2012.
According to reports in Indian media, Etihad will be a strategic partner for Jet and will receive a number of board seats in return for its investment.
The deal comes despite the fact that Isle of Man-registered Jet Airways – owned by NRI Naresh Goyal – has been losing market share in the booming domestic market in India, slumping to third place behind Indigo and Air India and run up debts in excess of $2 billion.
It is believed that Mr Goyal became personally involved in the negotiation process with Etihad, a 10-year-old carrier which is fast spreading its’ tentacles around the world and also owns a stake in Australia’s second largest airline, Virgin Australia.
The deal will not only enable Jet to invest in its domestic routes but also utilize Abu Dhabi as a hub for its’ international operations.