In yet another hitch to the Jet Airways' equity sale to Etihad, the Abu-Dhabi-based airline has expressed reservations about the deal going through without a government assurance on protection of its foray into India.
According to a CNBC- TV18 report, Etihad has expressed concerns to the government regarding the safety of its investments. Etihad fears that its investment may meet a fate similar to Etisalat, the UAE-based telecom company which lost over Rs 3,000 crore in the 2G fiasco .
Last February, the Abu Dhabi-based telecom company Etisalat had to pull out of India and end the operations of its joint venture in India, following the Supreme Court decision to cancel 122 licences in the spectrum allocation scam.
This demand comes even after India and the United Arab Emirates had, in principle, agreed on a bilateral investment promotion and protection agreement to boost two-way trade. . The acquisition was to have been announced during commerce minister Anand Sharma’s current visit to the UAE.
Sources told CNBC-TV18 that the Jet-Etihad deal is likely to be delayed until an assurance from the government of India regarding its commitment to protect foreign investment is announced.
Though shares of Jet Airways recovered this morning, on Monday they tanked 7.70 percent to close at Rs 570.75 on the BSE on reports the Abu Dhabi-based Etihad Airways is looking to revise the terms of the deal to buy a stake in the Indian carrier.
On Sunday, Etihad Airways chairman Sheikh Hamed bin Zayed al-Nahyan said the Abu Dhabi-based airline needs to revise its deal to buy a stake in the Indian airline.