Shares of Jet Airways are higher as investors hoped that the Cabinet is likely to approve its stake sale to Etihad Airways. The Cabinet Committee on Economic Affairs (CCEA) is likely to take up the Jet-Etihad deal today.
Jet Airways shares were up 4.5% at Rs 386 in afternoon trade. Shares of Jet Airways have gone up by nearly 10 percent in three sessions. The chances of the Cabinet's approval were boosted after stock market regulator Sebi eased worries over the deal.
Sebi said the proposed sale of 24 per cent stake to the UAE-based Etihad does not give controlling powers to the foreign carrier. It observed that the Rs 2,058 crore deal should not trigger a mandatory open offer for purchase of shares from public shareholders and Etihad would not be considered a promoter entity in Jet.
The Union Cabinet has also cleared a bilateral accord between India and the UAE, allowing the countries to fly 50,000 additional seats between each other each week over the next three years, up from 13,700 earlier.
The Jet stake sale was announced in April and has been stuck due to objections from regulators, as it was deemed the Etihad deal yielded significant control of the Indian airline to the foreign carrier. Jet Airways has revised the deal terms since then. Many opposition members had also questioned the timing of the stake sale given that the deal was announced soon after the Aviation ministry approved the bilateral seat-sharing accord with UAE.
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