Jet Air-Etihad deal to be signed in three months: Sources

The much talked about Jet-Airways-Etihad  deal may be structured in two tranches and will be signed within three months, exclusive sources told CNBC-TV18.  The deal is still at a due diligence stage, it is learnt. 

Jet Air and Etihad have not confirmed the stake sale news but sources say, the deal may be a combination of fresh issue and secondary sale of shares. Promoter Naresh Goyal is likely to sell 15% directly in first tranche and Etihad will increase its stake further via a fresh issue. . Etihad is likely to hold up 23-24% stake post the completion of the deal since the Middle East-based carrier is not eyeing a majority stake in company.
Proceeds of the stake sale will be used to retire Rs 12,000 crore debt, Jet has on its books.
Sources further say that Etihad will also have its officials on Jet's Board post the completion of the deal. Both firms may also sign tech sharing agreement for daily operations.
If the deal comes through, Jet Air will become the first Indian carrier to receive foreign investment after the government lifted the bar on restricting foreign direct investment in the sector.
If the deal is successful, it will also help the loss-making Jet Airways scale up operations and give it a better shot at improving its financials.
"Jet does not have the financial muscle to expand globally," said Jitendra Bhargava, former director Air India.
"Due to constraints it has withdrawn flights from Milan and Johannesburg. The alliance, if goes through, will promptly put Jet on the global map," he added.