Etihad Airways expects a $600 million investment in Jet Airways to be cleared by Indian authorities imminently, as it further extended a deadline for regulatory approval that ended on Aug 31, the Abu Dhabi carrier said on Sunday.
Etihad’s plan to buy a 24 percent stake in Jet had been delayed by regulators and by concerns from some politicians an April bilateral accord on air services between India and the United Arab Emirates was hurting Indian airlines’ interests.
A potential stake purchase would be the first by an overseas operator in an Indian airline since ownership rules were relaxed and provides India’s largest carrier with a deep-pocketed global partner as well as cash to pay down debt.
Etihad confirmed that it agreed to extend a deadline for the deal to win regulatory approvals for a second time until end of September.
The deadline had been extended by a month in August.
“The revised agreements are expected to be endorsed by the Competition Commission of India and the Indian Government imminently,” Etihad said in an emailed statement, its first comments after the deal hit snags with the Indian authorities.
The Gulf airline said its Chief Executive James Hogan met Jet chairman Naresh Goyal in Mumbai this weekend to “review progress on the finalization” of the deal.
“We are working very closely with the Indian Government and regulatory authorities to ensure we meet all the requirements of the new foreign direct investment legislation,” James Hogan said in the statement.
The airlines won conditional approval from India’s foreign investment regulator in July but it still needed clearance from the capital markets regulator and a ministerial investment panel.
Opposition politicians have also objected to the deal on grounds that the bilateral accord between India and the United Arab Emirates increasing the number of airline seats per week favored Etihad more than Indian carriers.
Indian authorities are yet to say when the deal will be sent to a cabinet panel for the final approval. Authorities could not be contacted on Sunday as it is a public holiday.
Etihad agreed to pay $379 million for a 24 percent stake in Jet in April. It also invested an additional $150 million in Jet’s frequent flyer program and spent $70 million to buy Jet’s three pairs of Heathrow slots through a sale and leaseback agreement.
(Editing by Dinesh Nair and Keiron Henderson)