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To acquire a 24 per cent stake in Jet Airways, the airline in India, Etihad Airways is set to invest $379 million (Rs 2,050 crore. This is part of a $600-million commitment to strengthen the partnership between the two airlines.
The current deal values Jet at around Rs 8,500 crore. Under the agreement, the Abu Dhabi-based airline will subscribe to 2.72 crore new shares of Jet Airways at Rs 754.74 a share. The share allotment is at a substantial premium to the scrip’s closing price of Rs 573.15 on the NSE on April 23. This deal will not trigger an open offer for other shareholders in Jet since it is below the trigger-limit.
However, Jet still has scope to bring in other investors, as the policy allows foreign airlines holding up to 49 per cent in a domestic carrier. A joint statement put out by the two airlines said that Etihad Airways’ wider overall commitment includes the injection of $220 million to create and strengthen a wide ranging partnership between the two carriers.