It has been dubbed as the first major deal since the Indian aviation sector opened up to foreign direct investment (FDI) but it seems Etihad’s stake purchase of Jet Airways is likely to be delayed till August.
Shares in Jet fell by nearly 6 per cent amid concerns that the deal with the Abu Dhabi-based carrier has been held up.
Etihad has been expected to acquire around 24 per cent equity in Jet Airways. The Gulf airline had paid around $70 million to buy Jet's three pairs of slots at London's Heathrow airport in February and confirmed that it remains in talks to buy a stake in the leading Indian private carrier.
The deal, which would inject much-needed funds into Jet and help Etihad expand its reach into the Indian market, has reportedly slowed down over a number of concerns around safety of Gulf investments into India and pricing.
Etihad is on an expansionist spree and has negotiated stake purchases in four foreign airlines including Air Berlin, Virgin Australia, Aer Lingus and Air Seychelles. The Indian government had allowed 49 per cent FDI in civil aviation last year as a means to ease the sector’s financial woes.