Opening up the sky The Jet stake sale deal is marking the first FDI infusion by an airline in the Indian aviation sector The finalisation of the deal came over a week after the Competition Commission of India approved the acquisition of stake in Jet by Etihad The deal also includes $150 million soft loan from Etihad, another $100 million investment by Etihad in Jet's frequent flyer programme and sale of two Jet slots at the Heathrow airport to Etihad for $70 million

New Delhi, November 20
Jet Airways and Etihad today announced closure of a Rs 2,069-crore deal for the Abu Dhabi-based carrier to pick up 24% equity in the Indian airline, marking the first FDI infusion by an airline in the Indian aviation sector.

Maintaining that all requisite regulatory approvals from Indian authorities have been obtained on November 12, the two airlines said Jet had “issued and allotted 27,263,372 equity shares of a face value of Rs 10 each at a price of Rs 754.7361607 per equity share on a preferential basis to Etihad Airways.”

Following the allotment of equity shares on preferential basis to Etihad Airways, Etihad Airways holds 24 per cent of the post-issue paid up share capital of Jet Airways “on a fully diluted basis”. As per legal requirements, a 51 per cent stake would be held by Jet and its chairman and promoter Naresh Goyal.

In a statement, the two carriers also announced that Etihad president and CEO James Hogan and its chief financial officer have been appointed as additional directors on the board of directors of Jet from today.

The announcement came shortly after a Jet Board meeting in Mumbai today.

Goyal and Hogan said, “The collaboration between the airlines would commence immediately with a view to delivering network and service benefits to customers as soon as possible. Specific details will be released progressively.”

The Jet stake sale deal is the first of its kind in an Indian airline. The announcements by Malaysian carrier AirAsia to set up AirAsia India and by Singapore Airlines to set up a joint venture airline with Tata Sons, are yet to fructify.

“Consequent to the above allotment, the paid up share capital of Jet Airways stands increased to 11,35,97,383 equity shares of Rs 10 each,” the statement said.

Goyal said the FDI infusion would “result in economies of scale, grow traffic at our airports and create job opportunities. I am confident that this investment will greatly benefit all our stakeholders whilst significantly benefitting our customers who will now have access to a more expanded global network.”

He said together with Etihad Airways, Jet Airways would “enhance connectivity for tourists, business travellers, Indian families and the wider travelling public.”

Describing India as one of the largest and fastest- growing markets in the world and “a key part of the Etihad Airways growth strategy”, Hogan said, “Through this association, Etihad Airways and Jet Airways will both be strengthened, as will the economies of India and the UAE.”

“By linking our two networks and adding new flights, new routes and more code-share options, travel to, from and within India will become much easier.” The finalisation of the deal came over a week after the trade regulator Competition Commission of India (CCI) approved the acquisition of stake in Jet by Etihad, which was the last hurdle.

Though all the regulatory approvals are in, the courts are hearing two petitions against the deal.

The deal also includes $150 million soft loan from Etihad, another $100 million investment by Etihad in Jet’s frequent flyer programme, JPMiles and sale of two Jet slots at the Heathrow airport to Etihad for $70 million. — PTI

Chandigarh, November 20
The National Association of Software and Services Companies (NASSCOM) president, Som Mittal, today said startups would have a great impact on the country's growth.

He was here to inaugurate a two-day IT conclave, Destination IT@North, organised by the Chandigarh Administration, STPI, Department of IT, Punjab, CII and Nasscom.

He said Nasscom recently launched “Mission 10,000” with a plan to incubate, fund and support 10,000 technology startups in the country over the next 10 years.

“Young entrepreneurs have innovative ideas who can bring in socio-economic transformation in India and the lives of the people. Even the bigger IT companies are depending more on startups to plug in innovative ideas to their plans,” he said.

He asked the goverments to help and encourage the entrepreneurs through an enabling ecosystem and by providing more incubation centres. About the growth of IT industry in the country, STPI Director General Omkar Rai said the industry had improved in the second quarter to 7.6%. “We have to transform the $108 billion (Rs 6.8 lakh crore) economy into a $300 billion (Rs 18.5 lakh crore) economy by 2020,” he said.

Mumbai, November 20
The benchmark Sensex fell 256 points, the most in more than two weeks, in a late sell-off that capped a choppy session today as investors booked profits and global markets turned cautious.

Shares fell as the rupee declined against the dollar for the first time in five days. The rupee lost 21 paise to close at 62.57.

ICICI Bank, HDFC Bank along with heavyweights Reliance Industries and Infosys dragged the index lower. Hindalco Industries, Bharti Airtel and Hero MotoCorp were among the 26 losers on the Sensex, even as Coal India emerged as the biggest gainer. Bank, consumer durables and auto shares led 12 of the 13 BSE sectoral indices down.

After opening lower, the S&P BSE Sensex plunged in the last hour of trade, dropping to a low of 20,579.94. The index recovered some ground and closed at 20,635.13, a loss of 255.69 points or 1.22 per cent.

It was the biggest drop for the index since November 5.

In the previous three sessions, the Sensex had notched up gains of 696 points.

The broader CNX Nifty index on the National Stock Exchange was down 80.45 points, or 1.3 per cent, at 6,122.90. The SX40 on the MCX Stock Exchange closed 155.5 points lower at 12,245.9.

"Once again, heavy selling pressure in the last hour of trade brought Nifty to negative territory,” said Nidhi Saraswat, Senior Research Analyst at Bonanza Portfolio Ltd. — PTI

New Delhi, November 20
State-owned Coal India Ltd (CIL) has invited applications from interested entities for importing coal that would be supplied to power plants. The applicants can only be government department or government owned company or public sector entities.

In a notice on its website, the company said, “(CIL invites) NIT (Notice Inviting Tender) for selection of agency from government department or government owned company or public sector entity for the supply of imported coal to purchaser (power producers) at delivery point (power plant end)".

The importers will have the right to supply coal to various power plants across the country till March 2015.

“The successful bidder shall procure imported coal through tendering for the quantity required for each quarter separately," CIL said.

CIL chairman and managing director S Narsing Rao had recently said the company may import five to six million tonnes in the current financial year. “May be five-six million tonnes. We don't want to rule out the option. Some eligible people may come up in December and say that we want coal. It may not happen at all as it did not happen last year or it has not happened until now,” Rao had said.

BRIEFLY

$792m extra fine on Reliance
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Panel cautions govt
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Renault keen on MUV segment
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Mittal's home street costliest
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