Etihad has completed the due diligence of the proposed deal with Jet Airways. The Abu Dhabi based carrier has sough a right of first refusal agreement (RoFR) in the deal to buy out promoter stake at a later date, reports, reports CNBC-TV18's Kritika Saxena.
Jet Airways is selling 24 percent for around USD 330-350 million. Sources say that Etihad has completed the due diligence for Jet Airways. Now they are currently negotiating one last clause wherein essentially Etihad is asking for a RoFR in the share purchase agreement. The RoFR will essentially cushion Etihad if at all Jet Airways promoters want to look at partly or completely selling out their stake.
However, that clause has to be within the Indian 49 percent FDI limit. Of course Indian aviation regulation does not allow a foreign carrier to take in a controlling stake.
It is learnt that the senior management of Jet Airways including the promoter Naresh Goyal himself is in Abu Dhabi currently to finalise the structure. Etihad has also confirmed that the board will be meeting in order to finalise the deal structure and the due diligence report will be submitted to the board. In fact the Aviation Ministry earlier this week has also said that the deal should be completed in the next 10-15 days.
In the last stages Etihad is also subsequently raising some amount of concern as far as Jet’s offer for sale (OFS) is concerned. CNBC-TV18 had reported that Jet Airways was looking at raising or partly diluting stake through an OFS mode. But this is independent to the Etihad deal. Etihad is just asking for some basic clarity on that.