The foreign investment regulator gave conditional approval on Monday to a deal by Etihad Airways to buy a stake in Jet Airways, paving the way for more acquisitions in the domestic aviation sector. (Read story here)
But the regulatory approval did not come easy for the two airlines. There were some serious slips between the cup and the lip since the deal was first announced in April this year.
A quick timeline
April 24: Indian govt signs bilateral seat rights with Abu Dhabi, that provides additional 40000 seats for flights operated to and from India.
April 25: Etihad signs deal with Jet airways to buy 24% stake for Rs 2060 crores.The deal also involved an overall cash infusiion of $ 750 million in debt and equity. The infusion would help the airline cut its debt from $ 2.1 billion to $ 1.5 billion.
May 1: CPI MP, Gurudas Dasgupta writes to the PM alleging that the bilateral deal was done in a hurry to help Jet to conclude its deal with Etihad
May 29: Janata party President, Subramanian Swamy writes to the Prime Minister, calling the Jet-Etihad deal a fraud and links it to the bilateral rights signed between India and Abu Dhabi. Swamy alleges that the bilateral rights were signed to facilitate the deal between Jet and Etihad
July 2: PMO releases chain of communication between the various ministries, says Bilateral agreement between the two countries have nothing to do with the Jet-Etihad deal which is of private interest.
Later, FIPB & SEBI raised doubts over "effective control and ownership" of Jet passing over to Etihad. Both companies asked to rework the deal and submit revised shareholders agreement.
July 25: Airlines submit revised plan to Department of Industrial policy & promotion.Under the revised agreement, Etihad agrees to provide Naresh Goyal, Chairman of Jet Airways with the right to deliver a casting vote on any decision arrived by the board. Etihad also agrees to reduce its representation from three to two on the 12-member board.
July 29: FIPB clears Jet-Etihad deal with riders that keeps effective control with the current management. Etihad will not have majority seats on the board. The deal will now have to be cleared by the Cabinet committee of economic affairs and Competition commission of India.
