India's Jet Airways approves Etihad stake buy

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The board of Jet Airways has approved an Indian rupee (Rs) 20.6 billion ($380 million) share issue to Abu Dhabi's Etihad Airways, giving it a 24% stake in the Indian carrier.

The carrier announced on Bombay Stock Exchange that its board approved the issue of 26.3 million shares, "by way of a preferential allotment" priced at no less than Rs755 per share at a meeting on 24 April.

The issue remains subject to applicable laws and regulations, as well as Jet's shareholders, the airline adds.

Jet and Etihad have been in discussions over an equity alliance since late 2012, following the liberalisation of restrictions by the Indian government allowing foreign carriers to own up to 49% of a domestic carrier.

Etihad also briefly held discussions with grounded carrier Kingfisher Airlines, but decided not to pursue it further.

The two airlines already have a close codeshare relationship, and in February, Etihad paid Jet $70 million to purchase three pairs of slots at London Heathrow airport under a sale and leaseback arrangement.

Earlier this year, Jet agreed to wet lease an Airbus A330-200 to Etihad.

Etihad also holds a 29% stake in Air Berlin, 10% in Virgin Australia, 3% in Aer Lingus and 40% in Air Seychelles.

Jet recorded a profit after tax of Rs931 million for the quarter ended 31 December 2012, compared with an after tax loss of Rs1.23 billion for the prior corresponding period.