The Cabinet Committee on Economic Affairs (CCEA) on Thursday cleared the sale of 24% stake of Jet Airways to Abu Dhabi-based Etihad without any riders, around six months after the deal was first announced.
The clearance comes two days after Sebi’s go-ahead after the carriers revised the deal to comply with conditions set by it.
After studying the revised deal structure, Sebi was of the opinion that the Rs 2,058 crore transaction would not trigger a mandatory open offer for purchase of shares from public shareholders and Etihad would not be considered a promoter entity in Jet Airways.
In addition, Sebi has asked Naresh Goyal-led Jet promoters to divest a 6% stake before allotting the shares to Etihad.
In the interest of corporate governance and to ensure well-dispersed public shareholding, Goyal would eventually have a 51% stake in the company, Etihad 24% and the public the remaining 25%, according to the Sebi decision.
Though Jet Airways had announced the deal with Etihad on April 24, it was not cleared by the Foreign Investment Promotion Board in its meeting held in June after the civil aviation ministry raised concerns over the shift in place of business and the corporate affairs ministry raised objection over effective control post the deal.
The airline, in the revised agreement, decided to restore the supremacy of the board by making its authority ultimate.
The concern on the change in the place of business was also taken care of by converting the cooperation board into a committee that will only have an advisory role.
The CCEA also cleared the proposal of ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corp (ONGC), to acquire a 10% stake in Rovuma Area 1 offshore block in Mozambique for $2.64 billion; implementation of a scheme for setting up 750 MW grid-connected solar photo-voltaic power projects under the Jawaharlal Nehru National Solar Mission; Rs 3,507 crore for implementation of the National Mission on Oilseeds and Oil Palm during the twelfth Five-Year Plan (2012-17) to increase domestic availability of edible oil.
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