Abu Dhabi-based Etihad has agreed to settle for two directors on the board of Jet Airways, instead of the three it had sought earlier when it signed the deal to pick up a stake in India’s leading private sector airline.
This follows questions raised in various quarters on whether Etihad was asking for more powers than what its 24 per cent stake in Jet entitled it to. A clearance for the deal is still pending and both Jet and Etihad now hope that the re-worked agreement will ensure smooth passage. Officials from Etihad had also recently met the market regulator Securities and Exchange Board of India to address the latter’s concerns over control and substantive stake.
SEBI had given Jet and Etihad the option of amending the shareholder agreement and removing stringent clauses that were disproportionate to their voting rights. This meant that Etihad would have to forego the powers it sought for under the earlier agreement, such as appointment of directors and veto rights that were not in line with its 24 per cent stake.
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