FIPB defers decision on Rs 2,058 crore Jet Airways-Etihad deal

NEW DELHI: The Foreign Investment Promotion Board (FIPB) on Friday deferred its decision on the Rs 2,058 crore Jet-Etihad deal, the largest foreign investment in the Indian aviation sector.

Last month, capital market regulator Sebi and fair trade watchdog CCI had sought more clarity on the Jet-Etihad deal to ensure overall competition in the aviation market is not affected and interests of public shareholders and consumers are protected.

While the queries raised by the two regulators were different, both of them are concerned about certain contours of the transaction that indicate a larger control of Etihad in Naresh Goyal-led Indian carrier despite the purchase of only 24 per cent stake, according to sources.

Once the Jet-Etihad proposal is cleared by the Foreign Investment Promotion Board (FIPB), it will go to the Cabinet Committee on Economic Affairs (CCEA) for final clearance as the deal size exceeds Rs 1,200 crore.

Jet-Etihad deal assumes significance in the backdrop of government efforts to attract more foreign investments into the country. Also, the proposal comes after foreign carriers were allowed to pick up stakes in domestic airlines.

Jet Airways plans to sell 24 per cent stake to Abu Dhabi-based Etihad.

For the quarter ended on March 31, 2013, Jet reported a net loss of Rs 495.53 crore against Rs 298.12 crore for the same period a year ago.