Jet Airways falls 5% on concerns over Etihad deal
Jet Airways, the largest private airline company in India by market share, fell more than 5 percent in early trade on Friday as sources said the deal between company and Etihad could be in jeopardy due to Etihad's insistence on a right of first refusal.
February 22, 2013 / 13:39 IST
Moneycontrol Bureau
Shares of Jet Airways fell over 5 percent to Rs 538.85 after news reports stated that its stake sale deal with Etihad Airways could be in jeopardy.CNBC-TV18 has reported quoting sources that Etihad has requested for an option to increase its stake to 49%, if Jet promoters plan to exit in future. Naresh Goyal, chairman Jet, is not keen to include this clause in the share purchase agreement. Also, Eithad is keen to have four members on Jet's Board, which is again not gone well with Jet Air.This has heightened Etihad's concerns regarding the deal. Sources indicate that promoters and senior management of Jet Air are currently in Abu Dhabi to conduct and conclude negotiations. Sources also inform that the Indian government may also intervene to finalise the deal.Promoters through Tail Winds hold 79.99 percent stake in the company as of December 31, 2012. Meanwhile, even as its senior executives are reported to be in Abu Dhabi to further negotiate with Etihad on the proposed stake sale to the Gulf carrier, Jet Air engineers are on a "go-slow" mode following the failure of talks over wage hike and arrears, reports PTIFollowing this, the airline had to cancel two flights from Chennai to Madurai and Coimbatore, states the report.The engineers' move comes weeks after a section of the airline's technicians registered their protest on the same issue by sporting black bands. However, a Jet spokesperson said, the airline had to cancel two flights from Chennai due to engine repair and there is no labour related issue involved.
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