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Sebi unlikely to give Etihad an exemption

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SBI chairman Rajnish Kumar met Sebi chairman Ajay Tyagi on Wednesday to discuss the issue.

Mumbai: The Securities & Exchange Board of India (Sebi) is unlikely to exempt Etihad Airways from making an open o er to minority shareholders of Jet Airways even as lenders led by the State Bank of India try to persuade the regulator to do so, said two people familiar with the matter.

“The current regulations do not permit any such exemption,” said one person who is involved in the process. “The rules permit exemptions only for those companies that are being resolved under the bankruptcy code.”

SBI chairman Rajnish Kumar met Sebi chairman Ajay Tyagi on Wednesday to discuss the issue. Neither Kumar nor Tyagi could be contacted.

“Sebi itself cannot go against the provisions of the statutory takeover code and therefore, an open o er exemption is likely only if the process goes via IBC route,” said Sumit Agrawal of RegStreet Law Advisors.

Jet Open O er: Sebi Unlikely to Give Etihad an Exemption

Abu Dhabi-based Etihad, which owns 24 per cent in Jet Airways, and Jet chairman Naresh Goyal, who owns 51 per cent of the troubled airline, have been clashing over how to revive the airline, which defaulted on loans last month.

Following the default, lenders have been meeting with executives from Etihad and with Goyal over the airline’s Rs 8,000 crore debt, a process that hasn’t made much headway because of the contrasting claims by the two biggest stakeholders in the company.

The Gulf carrier has sought exemption from making an open o er and preferential pricing regulation — pegging the fair price of Jet shares at Rs 140- 150 apiece. It also warned that Jet’s nancial position is precarious, which the Goyal camp denies.

Jet Airways shares closed at Rs 265.40 on the BSE on Wednesday.

Meanwhile, the two key stakeholders and bankers have been discussing emergency funding for the airline. The amount under consideration is about $35 million.

Although the proposals are still fluid and are being discussed, lenders have the option to re ne the structure of the revival plan and could seek regulatory approval with a concrete proposal, said the second person. The regulator has not taken a final decision on the matter yet.