With market regulator Sebi now supposedly satisfied with the restatement of the shareholders' agreement with Jet Airways, the deal between the two airlines could go through soon.
That the deal was never a valuation exercise, was never in doubt. Jet Airways with a debt overhang of Rs 11,000 crore as on March 31, 2012-13 needed to stitch an alliance with an airline with deep pockets. Etihad has done it but the price is de facto management control of Jet. Given the way the operational economics of the domestic civil aviation sector had deteriorated, this was inevitable. Air India survives only because of the government backstop.
In addition to the Rs 2,060 crore that Etihad will pay for a 24 per cent equity in Jet Airways, the West Asian carrier will also infuse another tranche of over Rs 1,100 crore into the Indian carrier, as part of the deal.
18/06/13 Mihir Mishra/Indian Express
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That the deal was never a valuation exercise, was never in doubt. Jet Airways with a debt overhang of Rs 11,000 crore as on March 31, 2012-13 needed to stitch an alliance with an airline with deep pockets. Etihad has done it but the price is de facto management control of Jet. Given the way the operational economics of the domestic civil aviation sector had deteriorated, this was inevitable. Air India survives only because of the government backstop.
In addition to the Rs 2,060 crore that Etihad will pay for a 24 per cent equity in Jet Airways, the West Asian carrier will also infuse another tranche of over Rs 1,100 crore into the Indian carrier, as part of the deal.
18/06/13 Mihir Mishra/Indian Express
