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Abu Dhabi flag carrier Etihad Airways is close to finalising deal to buy a 24 per cent stake in Indian Jet Airways for US$300mn
The deal is expected to be worked out in May 2013, according to Indian aviation ministry sources.
“The issues related to the Bilateral Investment Promotion and Protection Agreement (BIPA) with the UAE will take own course. The government is finding ways to assure the UAE on investments in India. The deal could be finalised before BIPA takes shape,” said the ministry sources.
The deal would inject much-needed funds into Jet and help Etihad expand its reach into the Indian aviation market.
Etihad has been in talks for a 24 per cent equity stake in Jet ever since India relaxed ownership rules and allowed foreign airlines to buy up to 49 per cent stake in local carriers.
Earlier, aviation experts in UAE had said that the deal would be delayed at least until August due to concerns of failed forays in the past by Gulf investors into India and the Abu Dhabi firm’s demands to protect its potential investment, due to issues relating to what happened to some other UAE entities such as Etisalat and Emaar in India.
Jet Airways, however, said, “The deal has been delayed due to various considerations like pricing, management control and BIPA between both countries.”