Etihad deal delay to impact Jet's $300mn ECB issue: Sources

The uncertainty surrounding the Jet-Etihad deal will delay Jet Airway's USD 300 million fund raising plan via the external commercial borrowing (ECB) route, reports Kritika Saxena of CNBC-TV18.

Etihad which picked up 24 percent stake in Jet Air in April said that it is inappropriate to offer any comment on the deal as the airline is engaged a regulatory process to complete the deal. Must Read:Ajit Singh bats for Jet-Etihad deal; Jet's Goyal meets FM
Sources further say that both Jet and Etihad are unclear on timelines for government clearance regarding the deal. Also,the next few days will be very crucial for the deal when all the ministries and other agencies look at every aspect of these bilateral rights which are very important part of the entire Jet-Etihad deal.
Meanwhile, Jet was keen to replace its high cost rupee debt and had sought to raise USD 300 million to replace the same. The Naresh Goyal-led airline has a debt of USD 1.2 billion.
Infact Etihad was to facilitate USD 150 million of loans via its network of bankers. However, there is a possibility that Jet may look to raise USD 150 via bank financing and is working in this regard.
There are reports that both airlines will have to make required changes in the agreement as stipulated by markets regulator Sebi and the Foreign Investment Promotion Board.
Both carriers have not announced any open offer as the trigger limit is 25 percent, under the new takeover SEBI code regulations. Shares and voting rights being acquired by Etihad are below the trigger level (24 percent of equity capital or voting rights) prescribed in Regulation 3(1) and therefore, does not trigger the takeover code.