Thursday, April 25, 2013

Jet Airways shares zoom 20% after deal with Etihad Airways

Shares of Jet Airways today surged 20 per cent to touch a one-year high level in early trade after the company announced plans to sell 24 per cent equity to Etihad Airways for about Rs 2,058 crore.

Cheering the news, which came on a non-trading day yesterday, shares of the company today opened on a robust note and further jumped 20 per cent to Rs 688.60 – its 52 week high on the BSE.

At NSE, the scrip skyrocketed by 19.86 per cent to touch a one-year high of Rs 687.

The market value of the carrier climbed Rs 628 crore to Rs 5,582 crore.

In the first ever investment by a foreign airline in an Indian carrier, Jet Airways had yesterday announced plans to sell 24 per cent equity to Etihad Airways for about Rs 2,058 crore, as part of a strategic alliance that would lead to a major expansion in their global network.

Top officials including Jet promoter Naresh Goyal and Etihad President and CEO James Hogan announced the strategic equity alliance in Abu Dhabi under which the Indian private carrier would sell 27.26 million shares in a preferential offer to Etihad at Rs 754.74 apiece.

\"The value of this equity investment is USD 379 million (about Rs 2,058 crore) and will result in Etihad Airways holding 24 per cent of the enlarged share capital of Jet

Airways,\" a joint statement by the two airlines had said.

\"Substantial ownership and effective control will remain with Indian nationals, with Goyal as non-executive Chairman holding 51 per cent of the company,\" according to the statement.

This is the first investment by a foreign carrier in an Indian airline since the government changed the FDI policy in aviation last September to allow foreign carriers to pick up stake in their Indian counterparts.
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