The Rs over Rs 2000 crore Jet-Etihad deal was signed on April 24. But due to regulatory and political concerns, both entities have to amend certain clauses in the agreement and make fresh applications to the Sebi and FIPB.
Amid talks of Jet -Etihad deal missing the transaction closure deadline, both parties are in talks to extend the deadline to October-November, reports Kritika Saxena quoting exclusive sources.
Amid talks of Jet -Etihad deal missing the transaction closure deadline, both parties are in talks to extend the deadline to October-November, reports Kritika Saxena quoting exclusive sources.
Abu Dhabi's Etihad picked up 24 percent stake in Jet Airways in April this year and deal is yet to get all necessary approvals.
Sources further say that both carriers have no plans to terminate agreement. However, they are working to make certain changes in the agreement.
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.
The clause also calls for termination of the deal if required approvals are not granted.
Executives are likely to submit amended agreement to market regulator Securities and Exchange Board of India (Sebi), the Competition Commission of India (CCI) and also the Foreign Investment Promotion Board (FIPB).
Clauses pertaining to board structure, nomination committee and control are being amended, sources add.
Meanwhile, the over Rs 2000 crore deal was signed around three months ago. But due to regulatory and political concerns, both entities have to amend certain clauses in the agreement and make fresh applications to the Sebi and FIPB.
However, after a month of the announcement of the deal, both parties had to revise the clause in which Etihad will not have the unilateral right to terminate commercial cooperation agreement and instead, both parties will now have the right on the same.
Earlier the FIPB has also raised concerns over Jet shifting its revenue management office to Abu Dhabi.
Meanwhile, Sebi chairman UK Sinha has said:" Sebi's position is very clear on any such deal. If anyone has acquired a stake in a company beyond certain threshold, then he has to make an open offer.
Second, even if the acquirer has got less than the threshold limit but has got control overl the company, then too he has to make an offer. Hence, Sebi will be looking into any case where there is a suspicion or beleif that control has been acquired. It will apply its tests and take its decisions."
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