In a first, Jet Airways to sell 24% stake in Abu Dhabhi’s Etihad for Rs 2,050 crore

April 25, 2013

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Mumbai, Apr 25: Naresh Goyal's Jet Airways and Abu Dhabi carrier Etihad finally enacted a well choreographed tango, clinching the first foreign direct investment ( FDI) deal after foreign airlines were allowed part- ownership of their Indian rivals.

On Wednesday, the Jet Airways board cleared preferential allotment of shares (at Rs 754 apiece) to Etihad, giving the latter a 24% direct stake in India's second largest airline by market share. Etihad will pay $379 million (about Rs 2,058 crore) for the stake, valuing Jet Airways at $1.57 billion, which is 32% higher than the current market value of the domestic carrier.

Etihad will take two board seats even as Goyal will hold 51% stake and remain non-executive chairman of Jet Airways. The Abu Dhabi airline will separately take majority shares in JetPrivilege, the frequent flyer unit of Jet Airways, for $150 million. It has already paid another $70 million to purchase Jet's slots at London's Heathrow airport.

The deal also has the potential to make Abu Dhabi the biggest emerging hub for Indian globe-trotters. Jet said it would establish a Gulf gateway in Abu Dhabi and expand its global reach through Etihad. "It's a game-changing opportunity for Etihad, and a game-changing opportunity for India," Kapil Kaul, regional head of the Centre for Asia Pacific Aviation (CAPA), told Reuters.

Late in the evening, India and Abu Dhabi governments as part of bilateral pacts agreed to increase the flying rights between the two countries to approximately 50,000 seats per week from the current 13,600 per week.

"This transaction further strengthens the balance sheet of Jet Airways and, more importantly, underpins future revenue streams, which will accelerate our return to sustainable profitability and liquidity," said Jet Airways chairman Naresh Goyal.

Etihad president and chief executive James Hogan added, "It (the deal) is expected to bring immediate revenue growth and cost synergy opportunities, with our initial estimates of a contribution of several hundred million dollars for both airlines over the next five years."

Eithad becomes the first big full service global airline to buy into the India story where travel is expected to triple to 159 million in the next 10 years. Earlier this year, Kuala Lumpur based low cost carrier AirAsia announced a joint venture with Tata Group to float a new airline.

The multi-layered deal-making was a complex affair aided by a battery of law firms—Economic Laws Practice, Gagrats, Amarchand Mangaldas and DLA Piper—and investment banks Bank of America Merrill Lynch, Credit Suisse and HSBC. The transaction is subject to shareholder and regulatory approval, which bankers and lawyers expect to come by in the next three months.

In the first phase, people familiar with the transaction, said that Goyal will sell 5% of Jet Airways through an offer for sale (OFS) to comply with the new 25% public shareholding norms. Currently, public shareholding in Jet Airways stands at 20%. This is being done as Sebi rules require a company to first adhere to public shareholding norms before making a preferential allotment.

Goyal and his family through their holding company Tail Winds hold 80% in Jet currently. The pugnacious Indian aviation entrepreneur founded the airline 21 years ago. It now operates a fleet of 100 aircraft and flies to 73 destinations in India and 20 overseas.

People in the legal circles said that the Goyal family will transfer their interests in Tail Winds, which is an overseas corporate body (OCB) incorporated in Isle of Man, a tax haven to their personal names/entities, which will be the new holding company of Jet. This is being done as OCBs are no longer recognized by the RBI and an OCB can't take fresh positions in equity or debt. However, they added, since Tail Winds was given an exemption, the promoter would check with the banking regulator whether they have to the restructure their holding before the launch of the OFS scheme.

The deal with Etihad will bring in fresh money to Jet that will be used to retire debt, which stands at $2.3 billion. Set up in 2003, Etihad, with a fleet of 70 Airbus and Boeing aircraft, serves 86 cities in West Asia, Africa, Australia, Asia, US and Europe.

"The price is good for Jet. I think Etihad may have paid over the odds slightly, but with Kingfisher out of the picture there is only one full service heavyweight in town, and that's Jet," Sudeep Ghai, partner at consultancy Athena Aviation told Reuters.

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News Network
May 17,2024

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In scorching heat on a busy Kolkata street last month, commuters sought refuge inside a glass-walled bus shelter where two air conditioners churned around stifling air. Those inside were visibly sweating, dabbing at their foreheads in sauna-like temperatures that were scarcely cooler than out in the open.

Local authorities initially had plans to install as many as 300 of the cooled cabins under efforts to improve protections from a heat season that typically runs from April until the monsoon hits the subcontinent in June. There are currently only a handful in operation, and some have been stripped of their AC units, leaving any users sweltering.

“It doesn’t work,” Firhad Hakim, mayor of the city of 1.5 crore, said on a searing afternoon when temperatures topped 40C. “You feel suffocated.”

Attempts in Kolkata and across India to improve resilience to extreme heat have often been equally ill-conceived, despite a death toll estimated at more than 24,000 since 1992. Inconsistent or incomplete planning, a lack of funding, and the failure to make timely preparations to shield a population of 140 crore are leaving communities vulnerable as periods of extreme temperatures become more frequent, longer in duration and affect a wider sweep of the country.

Kolkata, with its hot, humid climate and proximity to the Bay of Bengal, is particularly vulnerable to temperature and rainfall extremes, and ranked by the Intergovernmental Panel on Climate Change as among the global locations that are most at risk.

An increase in average global temperatures of 2C could mean the city would experience the equivalent of its record 2015 heat waves every year, according to the IPCC. High humidity can compound the impacts, as it limits the human body’s ability to regulate its temperature.

Even so, the city — one of India's largest urban centres — still lacks a formal strategy to handle heat waves.

Several regions across India will see as many as 11 heat wave days this month compared to 3 in a typical year, while maximum temperatures in recent weeks have already touched 47.2C in the nation’s east, according to the Indian Meteorological Department. Those extremes come amid the Lok Sabha election during which high temperatures are being cited as among the factors for lower voter turnout.

At SSKM Hospital, one of Kolkata’s busiest, a waiting area teemed last month with people sheltering under colorful umbrellas and thronging a coin-operated water dispenser to refill empty bottles. A weary line snaked back from a government-run kiosk selling a subsidized lunch of rice, lentils, boiled potato and eggs served on foil plates.

“High temperatures can cause heat stroke, skin rashes, cramps and dehydration,” said Niladri Sarkar, professor of medicine at the hospital. “Some of these can turn fatal if not attended to on time, especially for people that have pre-existing conditions.” Extreme heat has an outsized impact on poorer residents, who are often malnourished, lack access to clean drinking water and have jobs that require outdoor work, he said.

Elsewhere in the city, tea sellers sweltered by simmering coal-fired ovens, construction workers toiled under a blistering midday sun, and voters attending rallies for the ongoing national elections draped handkerchiefs across their faces in an effort to stay cool. The state government in April advised some schools to shutter for an early summer vacation to avoid the heat.

Since 2013, states, districts and cities are estimated to have drafted more than 100 heat action plans, intended to improve their ability to mitigate the effects of extreme temperatures. The Centre set out guidelines eight years ago to accelerate adoption of the policies, and a January meeting of the National Disaster Management Authority pledged to do more to strengthen preparedness.

The absence of such planning in Kolkata has also meant a failure to intervene in trends that have made the city more susceptible.

Almost a third of the city’s green cover was lost during the decade through 2021, according to an Indian government survey. Other cities including Mumbai and Bengaluru have experienced similar issues. That’s combined with a decline in local water bodies and a construction boom to deliver an urban heat island effect, according to Saira Shah Halim, a parliamentary candidate in the Kolkata Dakshin electoral district in the city’s south. “What we’re seeing today is a result of this destruction,” she said.

Hakim, the city’s mayor, disputes the idea that Kolkata’s preparations have lagged, arguing recent extreme weather has confounded local authorities. “Such a kind of heat wave is new to us, we’re not used to it,” he said. “We’re locked with elections right now. Once the elections are over, we’ll sit with experts to work on a heat action plan.”

Local authorities are currently ensuring adequate water supplies, and have put paramedics on stand-by to handle heat-induced illnesses, Hakim said.

Focusing on crisis management, rather than on better preparedness, is at the root of the country’s failings, according to Nairwita Bandyopadhyay, a Kolkata-based climatologist and geographer. “Sadly the approach is to wait and watch until the hazard turns into a disaster,” she said.

Even cities and states that already have heat action plans have struggled to make progress in implementing recommendations, the New Delhi-based think tank Centre for Policy Research said in a report last year reviewing 37 of the documents.

Most policies don’t adequately reflect local conditions, they often lack detail on how action should be funded and typically don’t set out a source of legal authority, according to the report.

As many as 9 people have already died as a result of heat extremes this year, according to the meteorological department, though the figure is likely to significantly underestimate the actual total. That follows about 110 fatalities during severe heat waves during April and June last year, the World Meteorological Organization said last month.

Even so, the handling of extreme heat has failed to become a “political lightning rod that can stir governments into action,” said Aditya Valiathan Pillai, among authors of the CPR study and now a fellow at New Delhi-based Sustainable Futures Collaborative.

Modi's government has often moved to contain criticism of its policies, and there is also the question of unreliable data. “When deaths occur, one is not sure whether it was directly caused by heat, or whether heat exacerbated an existing condition,” Pillai said.

In 2022, health ministry data showed 33 people died as a result of heat waves, while the National Crime Records Bureau – another agency that tracks mortality statistics – reported 730 fatalities from heat stroke.

Those discrepancies raise questions about a claim by the Centre that its policies helped cut heat-related deaths from 2,040 in 2015 to 4 in 2020, after national bureaucrats took on more responsibility for disaster risk management.

Local officials in Kolkata are now examining potential solutions and considering the addition of more trees, vertical gardens on building walls and the use of porous concrete, all of which can help combat urban heat.

India’s election is also an opportunity to raise issues around poor preparations, according to Halim, a candidate for the Communist Party of India (Marxist), whose supporters carry bright red flags at campaign events scheduled for the early morning and after sundown to escape extreme temperatures.

“I’m mentioning it,” she said. “It’s become a very, very challenging campaign. The heat is just insufferable.”

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News Network
May 4,2024

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Canadian Police said they have arrested three Indians they suspect were part of the alleged hit squad that had killed Hardeep Singh Nijjar, a Sikh separatist leader involved with the Khalistan movement, which calls for an independent Sikh state.

Nijjar's killing had become the epicentre of a diplomatic row between India and Canada last year after Prime Minister Justin Trudeau alleged the role of "Indian agents" in the murder. India had rejected the charge as "absurd" and "motivated".

The three arrested Indians - Karan Brar, 22, Kamalpreet Singh, 22, Karanpreet Singh, 28 - were living as non-permanent residents in Alberta for three to five years, said Superintendent Mandeep Mooker, who leads the Integrated Homicide Investigation Team. The police have also released their photos.

They have been charged with first-degree murder and conspiracy to commit murder, showed court documents.

Police said that none of the suspects were known to them earlier and they were investigating their possible ties to the Indian government.

The murder remains "very much under active investigation," Royal Canadian Mounted Police (RCMP) Assistant Commissioner David Teboul told a press conference on Friday.

"There are separate and distinct investigations ongoing into these matters, certainly not limited to the involvement of the people arrested today, and these efforts include investigating connections to the government of India," CTV News quoted him as saying.

Nijjar, a Canadian citizen who was wanted in India on various terror charges, was shot dead outside a gurdwara in Surrey on June 18, 2023. Trudeau's charge against India sparked a massive row later that year with both countries expelling diplomats of the other country.

A fresh row erupted earlier this week after separatist slogans on 'Khalistan' were raised at an event addressed by Trudeau, prompting New Delhi to summon their Deputy High Commissioner and lodge a strong protest.

On the sidelines of the event, Trudeau told reporters that Nijjar's killing had created a "problem" that he could not have ignored.

India rejected his comment and said it once again showed Canada provides political space given to separatism, extremism, and violence. "This not only impacts India-Canada relations but also encourages a climate of violence and criminality in Canada to the detriment of its own citizens," foreign ministry spokesperson Randhir Jaiswal said.

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May 17,2024

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New Delhi: In fresh claim, Prime Minister Narendra Modi on Friday said that his government sent an envoy to Israel urging them to stop the airstrike in Gaza during Ramadan. He said that he urged Israel to maintain peace rather than engage in combat during the holy month.

In an interview with Aaj Tak, PM Modi said that his envoy told Israel they should not bomb Gaza, at least during the auspicious month of Ramadan.

"During the month of Ramadan, I sent my special envoy to Israel to meet and explain to Prime Minister (Benjamin Netanyahu) that he should not carry out bombings in Gaza during Ramadan. They made every effort to follow it, but in the end, there was a fight for 2-3 days," he said.

The Prime Minister said that he does not publicise such things even though people in India keep "cornering him on the Muslims issue".

PM Modi said that some other countries also tried to speak to Israel to halt the bombings and may have also achieved results.

"They may have got the results too. I also tried," he said.

During the interview, PM Modi also said that he made standalone visits to both Israel and Palestine, unlike earlier governments which used to display token secularism.

"There was a fashion earlier that if one has to go to Israel, a visit to Palestine is a must. Do secularism and come back. But I refused to do it," he said.

The Prime Minister also recounted an episode when he needed to travel to Palestine via Jordan.

"When the President of Jordan, who is a direct descendent of Prophet Muhammad, came to know that I am going to Palestine over (the airspace of Jordan), he told me 'Modi ji, you cannot go like this. You are my guest and will use my helicopter'," Modi claimed.

Describing the unique amalgamation of circumstances, he continued, "I went to his home for dinner, but the helicopter was of Jordan, the destination was Palestine, and I was escorted by Israeli flight attendants. All three are different but for Modi, all came together in the sky."

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