Jet Airways up over 19%; market-cap rises by Rs 746 cr
Mumbai: Shares of Jet Airways on Wednesday settled with gains of over 19 percent, adding Rs 746 crore to its market capitalisation as the Abu-Dhabi based Etihad paid USD 70 million to the Indian carrier Jet for three Heathrow slots.
In what is seen as a step towards closing its proposed investment plans in Jet Airways, Etihad Airways today said it has paid USD 70 million to buy three slots of the Naresh Goyal-promoted airline at Heathrow airport in London.
Regarding the ongoing stake sale talks between the two, Etihad said they continue to progress with discussions about further investment in Jet.
Reacting to the news, the shares which were on a down slide for the last five trading sessions surged to touch an intra-day high of Rs 537.75 on the BSE, a rise of 20 percent from their previous closing price.
At the close of trading, the stock was trading at Rs 534.85, higher by 19.27 percent from its previous closing price.
Fuelled by the spike in the share price, the market capitalisation of the company increased by Rs 746 crore to Rs 4,617 crore from Rs 3,871 crore in the previous trading session.
Today's deal further strengthens the existing commercial relationship between the two airlines, which came into effect in July 2008, making provision for codesharing, Etihad said.
On the 24 percent proposed stake sale to Etihad, Jet sources said, Jet has reportedly agreed to cede more management control, including more board positions to Etihad. However, this could not be officially verified with either Jet or Etihad officials.
If materialised, this will be second FDI in the domestic aviation sector after Malaysian carrier AirAsia announced a 49:51 percent partnership with Tatas and Telestra Tradepalce of Arun Bhatia in the middle of this month to launch a low-cost airline.