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Jet Airways India Ltd And Etihad Airways PJSC Set To Miss Deal Closure Deadline-Business Standard


Monday, 15 Jul 2013 08:16am EDT 

Business Standard reported that Jet Airways India Ltd And Etihad Airways PJSC's deal is likely to miss its transaction closure deadline in the absence of various regulatory approvals. In April the two airlines signed the deal under which Abu Dhabi based Etihad agreed to pick up 24% stake in Jet Airways. The agreement has a clause called the 'long stop date' which stipulates that all regulatory approvals will be secured by July 31. The approvals are necessary for the conclusion of the transaction. While both the sides can extend the deadline, the agreement also allows for termination of the deal if the conditions precedent (regulatory approvals) are not met. The INR2.060 billion deal and the allotment of additional traffic rights to Abu Dhabi has turned controversial. Opposition MPs and politicians including Janata Party chief Subramanian Swamy has demanded that additional traffic rights be scrapped and regulators are seeking a revision in the agreement as it confers too many powers to Etihad. The agreement requires approval from Securities and Exchange Board of India, Competition Commission of India, Foreign Investment Promotion Board and finally Cabinet Committee of Economic Affairs. So far the airlines have not secured approval from any of them.