Jet Airways (India) rose 3.08% to Rs 222.75 at 15:04 IST on BSE on reports Etihad Airways may be forced to make an open offer to retail shareholders of Jet Airways after market regulator Sebi served notice to the Abu Dhabi-based airline.
Meanwhile, the BSE Sensex was up 72.66 points, or 0.36%, to 20,439.48.
On BSE, so far 3.39 lakh shares were traded in the counter, compared with an average volume of 4.58 lakh shares in the past one quarter.
The stock hit a high of Rs 230.85 and a low of Rs 221.20 so far during the day. The stock hit a 52-week high of Rs 688.60 on 25 April 2013. The stock hit a 52-week low of Rs 210.25 on 5 February 2014.
The stock had outperformed the market over the past one month till 14 February 2014, falling 17.42% compared with the Sensex's 3.17% fall. The scrip had underperformed the market in past one quarter, falling 33.44% as against Sensex's 0.16% decline.
The small-cap company has an equity capital of Rs 113.60 crore. Face value per share is Rs 10.
Market regulator Sebi (the Securities and Exchange Board of India) has reportedly issued a show-cause notice to Etihad Airways and asked for a response on why it should not make a tender offer to Jet Airways' public shareholders as part of takeover rules.
According to reports, Sebi has served a notice on Etihad Airways for alleged violation of the takeover code regulations while acquiring 24% stake in Jet Airways.
According to Sebi's takeover code regulations, an open offer is triggered in multiple ways, including when an entity acquires 25% stake in a listed firm and/or if it acquires 'control' over it, added reports.
If Etihad has to make an open offer, it will have to buy the shares at Rs 754.74 per share, the price at which it agreed to buy a stake in Jet Airways in April 2013, reports suggested.
On 20 November 2013, Jet Airways and Etihad Airways, the national carrier of the United Arab Emirates, announced that both airlines closed the transaction for the subscription of a 24% equity stake by Etihad Airways in Jet Airways. All requisite Indian regulatory approvals had been obtained by 12 November 2013. Jet Airways on 20 November 2013, issued and allotted 2.7 crore shares of a face value of Rs 10 each at a price of Rs 754.7361607 per equity share on a preferential basis to Etihad Airways.
Consequent to the above allotment, the paid up share capital of Jet Airways stands increased to 11.35 crore shares of Rs 10 each. Following this issue and allotment of the said equity shares on a preferential basis to Etihad Airways, Etihad Airways holds 24% of the post issue paid up share capital of Jet Airways (on a fully diluted basis).
On 5 February 2014, the Competition Commission of India (CCI) reportedly approved purchase of 50.1% stake in Jet Privilege (JPPL), Jet Airways' loyalty programme, by Etihad Airways PJSC.
Clearing the transaction by a majority, CCI reportedly said that the deal was unlikely to have any adverse impact on market competition, as Etihad's purchase of 24% stake in Jet Airways (India) has already been approved and the two airlines were already partners in their respective frequent flyer programmes.
Under such customer loyalty programmes, airlines generally offer certain benefits to their frequent flyers. Under this deal, Etihad will acquire 50.1% stake in JPPL subsequent to the hiving off of Jet's loyalty business into the subsidiary on a going concern basis, reports added.
Jet Airways (India) reported a net loss of Rs 267.89 crore in Q3 December 2013, lower than net loss of Rs 891.01 crore in Q2 September 2013. Net sales rose 11.64% to Rs 4229.41 crore in Q3 December 2013 over Q2 September 2013.
The company reported a net loss of Rs 267.89 crore in Q3 December 2013 as against net profit of Rs 85 crore in Q3 December 2012. Net sales rose 7.3% to Rs 4229.41 crore in Q3 December 2013 over Q3 December 2012.
Jet Airways (India) said that rupee depreciation, high fuel prices and increase in airport charges continued to impact costs in Q3 December 2013. Instances of aircraft on ground impacted the quarter by Rs 105.70 crore, Jet Airways (India) said in a statement. During the quarter two A330's were sold and the balance access capacity is expected to be sold/leased out in coming quarter, the company said. Jet Airways said that fuel costs went up by approximately 10.6% in Q3 December 2013 over Q3 December 2012.
Jet Airways currently operates a fleet of 112 aircraft. With an average fleet age of 5.17 years, the airline has one of the youngest fleet of aircraft in the world. The company operates flights to 75 destinations.
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