Abu Dhabi-based Etihad Airways, reportedly, is set to acquire 24% stake in Jet Airways in next ten days in a deal valuing Rs 1,500-1,800 crore. The deal will help Etihad and its hub Abu Dhabi to counter the dominance of Dubai which is the largest airport in the region.
This will be the first investment in Indian Aviation sector which was opened for foreign airlines last year. Etihad will be paying 25-50% premium over Jet’s January 02, 2013 stock price depending at what price the 24% stake is sold.
For Jet, the deal means fresh infusion of capital to cut down its debt and could also lead to rationalisation of its long haul network. Jet’s current market capitalisation is little over Rs 5,000 crore.