FIPB to consider Jet-Etihad deal on July 29

The long-pending Jet-Etihad deal envisaging foreign investment of Rs 2,058 crore (Rs 20.58 billion) will come up before Foreign Investment Promotion Board (FIPB) for approval on July 29.

The FIPB, headed by Economic Affairs Secretary Arvind Mayaram, had last month deferred a decision on the proposal of the civil aviation major Jet for induction of the foreign partner Etihad on grounds of 'substantive ownership' and 'effective control'.

The Jet-Etihad proposal would be taken up for discussion on July 29 FIPB meeting, as per the agenda of the meet. After the FIPB meeting on June 14, the Finance Ministry had written to Jet Airways seeking clarity on the ownership structure.

It had also written to market regulator Sebi seeking its views on how 'substantive ownership' and 'effective control' are defined in respect to this deal.

According to sources, as per the shareholder agreement and governance agreement submitted by Jet before the FIPB meeting last month, the final ownership of the company goes into the foreign hands.

As per the proposed deal between Jet and Etihad, the Abu Dhabi carrier is acquiring 24 per cent stake in the Indian airline company. However, there have been concerns that Etihad was getting voting rights and other powers in excess of those equivalent to its proposed 24 per cent stake.

Market regulator Sebi had earlier this week said any entity acquiring control of a listed Indian company would need to make an open offer for public shareholders.

As per Sebi's takeover regulations, any entity acquiring a 25 per cent or more stake in a listed company needs to make a mandatory open offer for purchase of additional 26 percent shares from the public shareholders.