* Etihad in talks with Jet for possible investment: minister
* Etihad likely to buy 24 pct stake in Jet for up to $330
* Jet stock up as much as 3.4 pct; has nearly doubled in 3
(Adds details, share price)
By Anurag Kotoky
NEW DELHI, Jan 31 India's second biggest carrier
Jet Airways expects to finalise a stake sale deal with
Abu Dhabi's Etihad Airways in a week or so, an executive at the
airline, who declined to be named, said on Thursday.
India's Civil Aviation Minister Ajit Singh said earlier on
Thursday, after meeting the top executives of the two airlines,
that Etihad was in talks with Jet for a potential investment in
The terms of the possible deal have not been disclosed, but
a government source said earlier this month Etihad was in talks
to pick up a 24 percent stake in Jet for up to $330 million.
"The government's role is to make sure that whatever
agreement they come to is within the regulatory framework,"
Singh told reporters after the meeting, declining to give
details of the deal.
Top executives at the two airlines are in the Indian capital
to meet the civil aviation and trade ministers and senior
Separately, an official at India's trade ministry, who
declined to be named as he was not authorised to speak to the
media, said Etihad would soon apply to India's foreign
investment approval authority for investing in Jet.
The Jet deal, if closed, will be the first since India
relaxed ownership rules in September last year and allowed
foreign carriers to buy up to 49 percent in domestic carriers
that are battling stiff competition and high operating costs.
The aviation sector has been abuzz with talks of stake sales
to global carriers since the ownership rules were eased.
But investment bankers don't expect a slew of foreign
carriers striking deals in Asia's third-largest economy due to
worries about the sector's billions of dollars of debt and high
costs of operations.
Jet shares rose as much as 3.4 percent during the day on
Thursday to 614.80 rupees. The stock has nearly doubled in the
last three months on speculation about the stake sale talks with
Etihad's deal with Jet made operational sense, analysts have
said, as both carriers already have a codeshare pact allowing
them to rapidly ramp up the number of flights on lucrative
Gulf-India routes and challenging Dubai-based Emirates Airline.
Nearly 1.5 million Indians work in the United Arab Emirates,
which include Abu Dhabi and Dubai, and millions more work in
Saudi Arabia, Oman, Bahrain and Kuwait.
The deal with Etihad also gives Jet cash to pare some of its
debt. The investment will also put it on stronger footing to
compete with state-owned Air India Ltd on domestic
routes that feed into the flights to and from the Gulf.
(Reporting by Anurag Kotoky; Writing by Sumeet Chatterjee)