FIPB defers decision on Jet-Etihad deal

Moneycontrol Bureau

The Foreign Investment Promotion Board has deferred the decision to okay the Jet Airways deal with Etihad in which the former picked up 24 percent stake in the carrier.
The deal is touted as the largest and first foreign investment in the Indian aviation sector after the government permitted FDI in the industry last year.
Once the Jet-Etihad proposal is cleared by the FIPB, it will go to the Cabinet Committee on Economic Affairs (CCEA) for final clearance as the deal size exceeds Rs 1,200 crore.
The Jet-Etihad deal assumes significance in the backdrop of government efforts to attract more foreign investments into the country. Also, the proposal comes after foreign carriers were allowed to pick up stakes in domestic airlines.
In March, the FIPB had cleared the Rs 81-crore investment proposal of AirAsia to set up a JV airline company with Tata Sons and another partner.
For the quarter ended on March 31, 2013, Jet Air has reported a net loss of Rs 495.53 crore against Rs 298.12 crore for the same period a year ago.
Meanwhile, civil aviation minister Ajit Singh said, he does not see any major hurdles in clearing Jet-Etihad deal. Both carriers will have to clarify certain issues he said.
He furher said that the transaction is yet to get final nod from market regulator Sebi (Securities and Exchange Board of India).
He also said that AirAsia's plans to launch an airline in India along with its partners has been sent to home ministry for clearance. Read This: Jet Airways up 4% ahead of FIPB meet on Etihad deal