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
March 26,2020

Mar 26: As Kashmir reported its first COVID-19 death on Thursday, Islamic scholars urged people to follow the Ministry of Home Affairs guidelines on funeral and burial of those who die due to coronavirus pandemic.

“Medical science can’t be ignored and whatever directions there are in the (MHA) guidelines should be followed. As far as the funeral of the person, only family members should participate in the funeral and burial after wearing the protection kits,” the scholars said.

The MHA has stressed that there should be no bathing, kissing, hugging and reciting of verses while the body should be transported in a secured bag. Health experts have stressed that the grave for the person should be dug eight feet deep instead of normal six feet.

“The body of the person should be transported in a secured bag and the vehicle in which he is transported has to be decontaminated by the trained staff who should be wearing N-95 masks and protection equipment,” read the MHA guidelines.

Kashmir witnessed the first death of a COVID-19 patient from uptown city Hyderpora, who had a travel history of outside J&K as he was part of a ‘Tableegi Jamaat’.

Dr Naveed, Head of Department, at Chest Diseases Hospital Srinagar, said that no one from the family should go closer to the body and if someone from the family wants to see the face, he/she has to wear a complete protective gear.

“Burial bath is not recommended for the body. Grave for him should be dug eight feet deep instead of normal six feet,” he said.

As far as funeral prayers, he said, those intending to offer funeral should wear protective gear and maintain sufficient distance between the body and people.

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News Network
January 29,2020

Aurangabad, Jan 29: Accusing Prime Minister Narendra Modi and Union Home Minister Amit Shah of creating a conflict between Hindu and Muslim communities in the country, former JNU student leader Kanhaiya Kumar has said the Citizenship (Amendment) Act (CAA) was adding fuel to the fire.

He was speaking at a rally held on Tuesday at Pathri in Parbhani district of Maharashtra against the CAA and the National Register of Citizens (NRC). It was organised by NCP MLC Abdullah Durrani.

"Modi and Shah used to create conflicts between Hindus and Muslims during the Gujarat elections. Now they are adopting the same strategy in the country," Kumar alleged.

Citizens should keep the religious conflicts aside and question the present government about unemployment and the poor state of the economy, he said.

"Through the CAA, the government is adding fuel to the fire, which is already raging in the country," he alleged.

When anyone questions the government about the problems existing in the country, it in turn asks him about his citizenship, the former JNUSU leader alleged.

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News Network
February 5,2020

Mumbai, Feb 5: Maharashtra Chief Minister Uddhav Thackeray on Wednesday said there was no need to fear the Citizenship Amendment Act, but asserted his government will not allow the proposed National Register of Citizens to be implemented as it would "impact people of all religions".

Throwing out Bangladeshi and Pakistani migrants out of the country was an old demand of the Shiv Sena, the chief minister said in the third and concluding part of his interview to party mouthpiece 'Saamana'.

"I can confidentally say the Citizenship (Amendment) Act (CAA) is not meant to throw Indian citizens out of the country. But, the National Register of Citizens (NRC) is going to impact Hindus as well," the Sena president said.

India has the right to know the number of minorities from neighbouring nations who applied for Indian citizenship after being persecuted in their home countries, he said.

"When they come here, will they get homes under the 'Pradhan Mantri Awas Yojana'? What about employment and education of their children? All these issues are important and we have the right to know," hesaid in the interview to Saamana's executive editor and Sena MP Sanjay Raut.

"As chief minister, I should know where will these people be relocated in my state. Our own people don't have adequate housing. Will these people go to Delhi, Bengaluru or Kashmir, since Article 370 is now scrapped?" he wondered.

Several Kashmiri Pandit families are staying like refugees in their own country. The CAA is not to throw citizens out of the country, Thackeray said.

"However, the NRC will impact Hindus and Muslims and the state government will not allow it to be implemented," he asserted.

Under the NRC, all citizens will have to prove their citizenship. In Assam, 19 lakh people could not prove their citizenship. Of these, 14 lakh are Hindus, Thackeray claimed.

In a veiled attack on his cousin and MNS chief Raj Thackeray, who will lead a rally in support of the CAA and NRC in Mumbai on February 9, the chief minister said the NRC is not yet a reality and there is no need for a 'morcha' in support of or against it.

"If the NRC is enforced, those who are supporting it will also be affected," he said.

Under the NRC, even Hindus will have to prove their citizenship. "I will not allow the law to be enacted. Whether I am chief minister or not, I will not allow injustice to anybody," he said.

The chief minister also took a veiled dig at the Centre's decision to give the Padma Shri award to Pakistani-origin musician Adnan Sami.

"A migrant is a migrant. You can't honour him with the Padma award. Throwing out illegal migrants was the stand of (late Shiv Sena supremo) Balasaheb Thackeray," he said without naming anyone.

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