Etihad agrees to cut number of directors on Jet board
Etihad Airlines agreed to cut number of directors on Jet Airways Board to two posts under their Rs 2058 crore deal. This will give the Indian promoters effective control of the carrier.
July 27, 2013 / 13:41 IST
Abu Dhabi-based Etihad Airlines has agreed to halve the number of directors on the Jet Airways Board to two posts under the Rs 2,058 crore deal, giving the Indian promoters 'effective control' of the carrier.
Also read: CommMin intervenes to ease Jet-Etihad deal throughThis, alongwith other details of an amended shareholding agreement (SHA), has been forwarded to Finance Ministry ahead of the FIPB meeting on July 29 to consider the proposal. As per the revised shareholding agreement, Etihad would have two directors on the board after the deal, as against the earlier proposal of four directors in the 10-member board, sources said.This seeks to address the concerns of Foreign Investment Promotion Board (FIPB) and market regulator Sebi with regard to effective control after the foreign direct investment, which is the largest FDI in the aviation space so far.The agreement says that major decisions, including appointment of independent directors and the chairman and vice-chairman will now be taken on the basis of majority of votes.
However, there will be no change in the shareholding pattern with Etihad picking up 24 percent, key promoter Naresh Goyal holding 51 percent and the remaining 25 percent with others, including institutions and individuals.
Besides Finance Ministry, the Department of Industrial Policy and Promotion (DIPP) would be scrutinising the revised proposal over the weekend so that a firm view could be taken at the meeting on Monday.
Shares of Jet Airways jumped 19.36 percent to Rs 402 in afternoon trade on the BSE. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
