India's Jet says Etihad investment to be completed in a few months

NEW DELHI Tue Jul 16, 2013 9:48am EDT

NEW DELHI (Reuters) - Jet Airways (India) Ltd (JET.NS) expects investments by Abu Dhabi's Etihad Airways in the airline to be completed within the next few months, Jet Chairman Naresh Goyal wrote in the company's annual report.

Etihad in April agreed to buy a 24 percent stake in Jet for $379 million. It is also making a $150 million equity investment in Jet's frequent flyer programme, and spent $70 million to buy Jet's three pairs of Heathrow slots through a sale and leaseback agreement announced in February.

"All these investments...are subject to obtaining the requisite regulatory and corporate approvals and final commercial agreements, which is expected to be completed within the next few months," Goyal wrote to shareholders.

Etihad's investment in Jet, which is the first by a foreign operator in an Indian airline since ownership rules were relaxed, is yet to win regulatory approval. India's Foreign Investment Promotion Board last month deferred a decision seeking more details on "effective control".

The deal also needs to be cleared by the capital markets regulator and will need final approval from a cabinet panel on investments.

Jet, which has called its annual shareholder meeting on August 8, is seeking shareholders' approval to increase its borrowing limit to 250 billion rupees ($4.2 billion), according to the annual report posted on its website.

(Reporting by Devidutta Tripathy; Editing by Sunil Nair)