In a first, Jet Airways to sell 24% stake in Abu Dhabhi’s Etihad for Rs 2,050 crore

April 25, 2013

Abu_Dhabhis_Etihad

Mumbai, Apr 25: Naresh Goyal's Jet Airways and Abu Dhabi carrier Etihad finally enacted a well choreographed tango, clinching the first foreign direct investment ( FDI) deal after foreign airlines were allowed part- ownership of their Indian rivals.

On Wednesday, the Jet Airways board cleared preferential allotment of shares (at Rs 754 apiece) to Etihad, giving the latter a 24% direct stake in India's second largest airline by market share. Etihad will pay $379 million (about Rs 2,058 crore) for the stake, valuing Jet Airways at $1.57 billion, which is 32% higher than the current market value of the domestic carrier.

Etihad will take two board seats even as Goyal will hold 51% stake and remain non-executive chairman of Jet Airways. The Abu Dhabi airline will separately take majority shares in JetPrivilege, the frequent flyer unit of Jet Airways, for $150 million. It has already paid another $70 million to purchase Jet's slots at London's Heathrow airport.

The deal also has the potential to make Abu Dhabi the biggest emerging hub for Indian globe-trotters. Jet said it would establish a Gulf gateway in Abu Dhabi and expand its global reach through Etihad. "It's a game-changing opportunity for Etihad, and a game-changing opportunity for India," Kapil Kaul, regional head of the Centre for Asia Pacific Aviation (CAPA), told Reuters.

Late in the evening, India and Abu Dhabi governments as part of bilateral pacts agreed to increase the flying rights between the two countries to approximately 50,000 seats per week from the current 13,600 per week.

"This transaction further strengthens the balance sheet of Jet Airways and, more importantly, underpins future revenue streams, which will accelerate our return to sustainable profitability and liquidity," said Jet Airways chairman Naresh Goyal.

Etihad president and chief executive James Hogan added, "It (the deal) is expected to bring immediate revenue growth and cost synergy opportunities, with our initial estimates of a contribution of several hundred million dollars for both airlines over the next five years."

Eithad becomes the first big full service global airline to buy into the India story where travel is expected to triple to 159 million in the next 10 years. Earlier this year, Kuala Lumpur based low cost carrier AirAsia announced a joint venture with Tata Group to float a new airline.

The multi-layered deal-making was a complex affair aided by a battery of law firms—Economic Laws Practice, Gagrats, Amarchand Mangaldas and DLA Piper—and investment banks Bank of America Merrill Lynch, Credit Suisse and HSBC. The transaction is subject to shareholder and regulatory approval, which bankers and lawyers expect to come by in the next three months.

In the first phase, people familiar with the transaction, said that Goyal will sell 5% of Jet Airways through an offer for sale (OFS) to comply with the new 25% public shareholding norms. Currently, public shareholding in Jet Airways stands at 20%. This is being done as Sebi rules require a company to first adhere to public shareholding norms before making a preferential allotment.

Goyal and his family through their holding company Tail Winds hold 80% in Jet currently. The pugnacious Indian aviation entrepreneur founded the airline 21 years ago. It now operates a fleet of 100 aircraft and flies to 73 destinations in India and 20 overseas.

People in the legal circles said that the Goyal family will transfer their interests in Tail Winds, which is an overseas corporate body (OCB) incorporated in Isle of Man, a tax haven to their personal names/entities, which will be the new holding company of Jet. This is being done as OCBs are no longer recognized by the RBI and an OCB can't take fresh positions in equity or debt. However, they added, since Tail Winds was given an exemption, the promoter would check with the banking regulator whether they have to the restructure their holding before the launch of the OFS scheme.

The deal with Etihad will bring in fresh money to Jet that will be used to retire debt, which stands at $2.3 billion. Set up in 2003, Etihad, with a fleet of 70 Airbus and Boeing aircraft, serves 86 cities in West Asia, Africa, Australia, Asia, US and Europe.

"The price is good for Jet. I think Etihad may have paid over the odds slightly, but with Kingfisher out of the picture there is only one full service heavyweight in town, and that's Jet," Sudeep Ghai, partner at consultancy Athena Aviation told Reuters.

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News Network
May 9,2020

Lucknow, May 9: The first patient to receive plasma therapy as an experimental treatment for coronavirus infection in Uttar Pradesh died following a heart attack on Saturday.

The patient, a 58-year-old doctor, was admitted at the King George’s Medical University (KGMU) here.

The doctor, who was on ventilator since the last 14 days, died on Saturday evening following a heart attack, KGMU Vice-Chancellor M L B Bhatt said.

Since he had high blood pressure and diabetes, he was under the continuous observation of doctors in the isolation ward, Bhatt said.

“The patient was in a stable condition. His lungs had improved, but he later developed urinary tract infection. Two reports of his samples came out as negative (for COVID-19) today,” the vice-chancellor said.

“He, however, suffered a heart attack around 5 pm. Despite all efforts, he could not be saved,” he said.

The doctor from Orai in Uttar Pradesh was administered plasma therapy at the state-run KGMU on April 26. He was administered the plasma donated by a doctor from Canada who was the first COVID-19 patient admitted at the hospital and later recovered.

Tulika Chandra of Blood Transfusion Department, KGMU said, "When the patient was given plasma therapy, his condition was very bad. His lungs, however, improved. But as he was an old patient with diabetes, he was kept on the ventilator.”

Convalescent Plasma Therapy is an experimental procedure for treating COVID-19 patients. In this treatment, plasma, a blood component, from a cured patient is transfused to a critically ill coronavirus patient.

The blood of a person who has recovered from COVID-19 develops antibodies to fight the virus. This therapy uses the antibodies from the blood of a cured patient to treat another critical patient.

The Union health ministry, however, had advised against considering the therapy to be a regular treatment for coronavirus, adding it should be used for research and trial purposes till there is a piece of robust scientific evidence to support its efficacy.

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Agencies
March 22,2020

New Delhi, Mar 22: The central government on Sunday decided to suspend all metro train services across the country till March 31 in view of coronavirus outbreak.

In a message to managing directors of all metro train corporations, Union Housing and Urban Affairs Secretary Durga Shanker Mishra said this is being done in continuation of suspending metro services during 'Janta Curfew'.

"In view of the current global pandemic of this Corona Virus & for containing its further spread through inter-personal proximity, it has been decided to close down metro rail services on all operational networks across the country till 31 March 2020," Mishra tweeted.

In another tweet, he said by the act of social distancing, people can protect themselves and their dear ones, and win the fight against COVID-19.

India reported three more coronavirus deaths on Sunday, including the first casualty from Bihar, taking the toll to seven and the number of COVID-19 cases rose to 341, officials said.

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News Network
June 8,2020

New Delhi, Jun 8: Places of worship on Monday across the country reopened after staying shut since March due to the COVID-19 induced lockdown.

Scores of temples, mosques and gurudwaras were seen opening up keeping in view the Standard Operating Procedure (SOP) issued by Union Home Ministry to prevent coronavirus spread.

As per Ministry of Health guidelines, touching of idols/holy books, choir/singing groups, etc are not allowed.

In Delhi, people gathered at Gauri Shankar Temple in Chandni Chowk to offer prayers. With national capital seeing a rise in coronavirus cases, the devotees were seen wearing masks and taking precautions. People were also seen offering prayers at Kalka Ji Temple.

Several people arrived at Sri Bangla Sahib Gurudwara to offer prayers. Devotees were made to pass through the disinfectant tunnel before entering the Gurdwara in order to prevent the virus.

In Uttar Pradesh, Chief Minister Yogi Adityanath offered prayers at Gorakhnath Temple after state government allowed re-opening of places of worship from today.

Devotees were seen offering prayers at Eidgah Mosque in Lucknow.

Devotees also offered prayers at Shree Dodda Ganapathi Temple in Basavanagudi, Bengaluru.

Hanuman Garhi Temple in Ayodhya also reopened on Monday.

Prayers were offered at Durga Mata Mandir near Jagraon Bridge in Ludhiana, as the government has allowed reopening of places of worship.

Although religious places have opened in most of the states, however, there are some states which are yet to do so.

Preparations related to Yatra of Char Dhams including Badrinath have been completed, however, local representative of the areas from where the routes of this yatra pass have requested the government to not allow the commencement of the Yatra.

Based on the assessment of the situation, the Odisha Government ordered that all religious places/places of worship for the public will continue to remain closed till June 30.

Earlier, the Union Ministry of Home Affairs (MHA) said that religious places and places of worship for public, hotels, restaurants and other hospitality services along with shopping malls will be permitted to open from June 8.

However, these facilities will not be able to resume operations inside containment zones designated by authorities in states.

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