In a major Foreign Direct Investment ( FDI) move in the aviation sector,Jet Airways on Wednesday agreed to sell 27.3 million shares to Etihad Airways. Jet Airways will sell the shares at Rs 754.73 per share. The Jet-Etihad transaction is estimated at around Rs 2000 crore.
For 24% dilution Jet will get Rs 2000 crore and the holding of Jet's promoter Naresh Goyal will be diluted to 61% from the current holding of 80%. Goyal holds these shares through Tailwinds, Jet's holding company which is listed in the Isle of Mann as per agencies report.
Post the allotment outstanding share capital of the company will be 113.13 million shares, where 24.2% will be held by Etihad, 61% by Goyal and the remaining 15% will be held by the public.
In an intimation to the stock exchanges Jet Airways announced that the Board of Directors of the company approved, subject to compliance with applicable laws and regulations and other necessary approvals, the issuance, by way of a preferential allotment 27.3 million equity shares (24% of Jet's equity) of the face value of Rs. 10/- (Rupees Ten only) to Etihad Airways PJSC at a price of not less than Rs. 754.7361607.
The approval of the shareholders for such issuance and allotment will be sought at an Extraordinary General Meeting to be held in this regard, Jet informed the stock exchanges.
The Board of Directors has granted approval for the Company and Etihad PJSC to enter into inter alia, the Investment Agreement in relation to such issuance and allotment and other documents incidental thereto.
The said preferential allotment is subject to various conditions precedent including regulatory approvals. Jet has got a huge premium of 34% per share in the deal that values the airline almost double its current market capital of Rs 4954 crore to an implied valuation of Rs 8575 crore or $1.56 billion. Last trading price of Jet's stock was at Rs 573.85 on Tuesday. Markets remained closed on Wednesday on account of Mahavir Jayanti.
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