September 30 deadline likely to be missed... Jet Airways’ proposal for selling a stake to Etihad could miss its September 30 deadline.
Jet Airways’ proposal for selling a stake to Etihad could miss its September 30 deadline.
This follows the Competition Commission of India (CCI) seeking more clarifications from Etihad, the national airlines of the United Arab Emirates, on the revised documents that it had submitted.
Sources indicated that Etihad was yet to submit papers signalling clearances from the Foreign Investment Promotion Board (FIPB). This is a crucial document, as FIPB had put in certain conditions.
On July 29, FIPB gave its nod to the deal, but placed three riders – Indian, not English, law must prevail in case of any dispute between the two airlines; Jet and Etihad must amend the Articles of Association to bring it in sync with the revised shareholders’ agreement; and that Jet will have to seek Government approval before making any changes to the shareholders’ agreement with Etihad or any change in the shareholding of the company.
CCI is now seeking documents from Etihad for these three riders before giving its nod for the deal. Sources said only after all the documents are submitted will CCI start the process of examining whether giving the approval will be detrimental to other airlines or not.
The entire process of examining the documents will take a few weeks, which raises the prospect of the deal missing the September-end deadline.
If the two airlines agree to an extension, it will be the third such instance. The two airlines were to wrap up the deal by July-end, but with the FIPB and the Securities and Exchange Board of India (SEBI) raising questions, the deadline for sealing the deal was pushed to August-end and then to September-end.
Among the objections raised was that even though Etihad was acquiring a 24-per-cent stake, it had a majority of directors on the board of Jet Airways.
The Government also wanted Jet Airways to ensure that the place of doing business does not shift from India once the deal is concluded.