India Dispatch: An Indian finance ministry meeting scheduled for yesterday in which a decision was expected to be made on the proposal for Etihad Airways to buy a 24 per cent stake in Jet Airways has been postponed until Friday.
Ruling delayed in Etihad bid for stake in India's Jet Airways
An Indian finance ministry meeting scheduled for yesterday in which a decision was expected over a proposal for Etihad Airways to buy a 24 per cent stake in Jet Airways has been postponed until Friday.
The approval of the foreign investment promotion board (FIPB) is required before the stake sale can go ahead. No reason was given for the postponement of the FIPB meeting, which was to include the discussion of several foreign direct investment proposals, the Economic Times reported.
Etihad in April became the first foreign carrier to agree to take a stake in an Indian airline after the government in September said it would allow investment of up to 49 per cent in its carriers from overseas airlines.
Etihad said it planned to buy a 24 per cent stake in Jet for $379 million. It said it would also invest an additional $220m in the partnership. Shares in Jet Airways have declined sharply this week. Shares fell as low as 384.70 rupees in trading on the Bombay Stock Exchange yesterday, after falling more than 12 per cent on Monday to close at 403.7 rupees.
On Friday, Jet Airways announced that Nikos Kardassis, who had been the chief executive of the Mumbai-based carrier for more than five years, had resigned with effect from last Wednesday.
Hameed Ali, the chief operating officer of Jet, has taken over as acting chief executive until "the board identifies and appoints a new chief executive", the company said. Jet Airways did not cite the reason for the departure of Mr Kardassis.
The FIPB in March cleared AirAsia's proposal to set up a budget airline with Tata. The carrier is expected to be launched this year. The Malaysia-based AirAsia plans to make an initial investment of $50m.