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THE HIMALAYAN DISASTER: TRANSNATIONAL DISASTER MANAGEMENT MECHANISM A MUST

We talked with Palash Biswas, an editor for Indian Express in Kolkata today also. He urged that there must a transnational disaster management mechanism to avert such scale disaster in the Himalayas. http://youtu.be/7IzWUpRECJM

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

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Thursday, April 25, 2013

Etihad Jets in with $379m FDI

Etihad Jets in with $379m FDI

New Delhi, April 24: Jet Airways today finalised a deal to sell a minority stake to Abu-Dhabi-based Etihad Airways for a little over Rs 2,000 crore as part of a strategic alliance that would lead to a major expansion in their global networks.

Etihad will acquire a 24 per cent stake for around Rs 2,058.7 crore ($379 million) in a deal which will be the first foreign direct investment (FDI) in aviation since foreign airlines were allowed in September last year to buy up to a 49 per cent stake in domestic carriers.

In a statement to the Bombay Stock Exchange today, Jet said it would issue 27.26 million new shares to Abu Dhabi-based Etihad for Rs 754.74 each, at a 32 per cent premium to Tuesday's closing share price. Markets were closed today.

"The value of this equity investment is $379 million and will result in Etihad Airways holding 24 per cent of the enlarged share capital of Jet Airways," a joint statement by the airlines said.

"Substantial ownership and effective control will remain with Indian nationals, with Naresh Goyal as non-executive chairman holding 51 per cent of the company," the statement said.

With Etihad as a partner, Jet would be able to take care of debts totalling $2.1 billion. The Indian carrier has informed the bourses that shareholders' approval for the allotment will be taken at an extraordinary general meeting.

Jet is likely to hold an extraordinary general meeting a month later to induct new members, including those from Etihad, on its board.

Etihad chief executive officer James Hogan and chief financial officer James Rigney are likely to be inducted, sources said.

Jet's board of directors has already approved the share allotment, which is subject to regulatory approvals.

Mutual benefits

According to aviation analysts, Jet would benefit from Etihad's strategic expertise, cheap financing and possible fuel import benefits in addition to the capital injection.

The two airlines claimed that their combined global network would cover over 140 destinations and provide direct foreign connectivity to Indian passengers from 23 metro and non-metro cities.

Jet will establish a Gulf gateway for its flights to the US, Europe, Africa and West Asia, apart from enhancing services from its primary hubs of Delhi and Mumbai.

Under the deal, Jet and Etihad will explore joint purchasing opportunities for fuel, spare parts, equipment and catering supplies as well as external services such as insurance and technology support. This will be a major cost-saver for Jet, which has been reeling under high fuel costs.

Other areas of co-operation will include joint training of pilots, cabin crew and engineers and maintenance of common aircraft types, the statement said. A joint project management office will be set up to ensure delivery of all synergy benefits to both parties.

Planning Commission deputy chairman Montek Singh Ahluwalia said the Jet deal was a proof of long-term investors' interest in India.

Sources said the Abu Dhabi-based airline would not make an open offer for more stakes in India's second biggest airline.

In February, Etihad CEO Hogan and Jet Airways' chairman Naresh Goyal led a joint delegation of both the airlines and separately met finance minister P. Chidambaram, civil aviation minister Ajit Singh and commerce minister Anand Sharma to apprise them about a possible stake sale deal.

Govt role

Sources said the Indian government's involvement, including recent visits to the United Arab Emirates by finance minister P. Chidambaram and others, helped to assuage the worries of Etihad.

"Not just Chidambaram's visit, there has been government-to-government talks at various levels. The UAE wanted some assurances, which the Indian government has given them," a senior diplomatic source said.

The deal sets a valuation benchmark for further investments in Indian airlines.

Jet shares have had a turbulent ride in recent months as talks dragged.

The stock is up about 70 per cent since November, after media reports about a possible stake sale. The Indian carrier confirmed talks with Etihad in January.

Etihad has negotiated stake purchases in four foreign airlines, including Air Berlin, Virgin Australia, Aer Lingus and Air Seychelles.

The airline has been on an acquisition spree to compete with other Gulf airlines, mainly Dubai-based Emirates and Qatar Airways.

According to recent reports, Emirates has taken more Indian passengers abroad than Air India.

India's civil aviation ministry had recently proposed raising the number of weekly flights to Abu Dhabi to 40,000 per week from 13,300.

Eyes on rivals

The Jet-Etihad deal comes at a time of growing foreign interest in Indian aviation.

A joint venture between Air Asia and the Tata group has already been registered and allowed by India's foreign investment promotion board.

The planned airline is in the process of seeking permissions from various regulatory bodies for an airline licence. The airline is expected to be set up with an initial investment of $50 million.

The aviation market has also been abuzz with talks of SpiceJet shedding stake to a foreign airline or equity investor, though there is no confirmation yet.

India's largest low-cost airline IndiGo also plans to come up with an initial public offer,which could draw foreign equity investors. However, foreign airlines are not expected to take stakes in the aggressive low-cost carrier.

http://www.telegraphindia.com/1130425/jsp/business/story_16824985.jsp#.UXk7XKKBlA0

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