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Jet Airways gains nearly 20 percent after Etihad deal

Source : REUTERS
Last Updated: Thu, Apr 25, 2013 04:18 hrs
Ground staff guide a Jet Airways aircraft towards a gate on the tarmac at Bengaluru International Airport in Bangalore

Mumbai: Shares in Jet Airways surged as much as nearly 20 percent after Gulf carrier Etihad Airways said it is taking almost a quarter stake in Jet Airways at 754.74 rupees per share, a 31.7 percent premium to Jet's closing share price on Tuesday.

Etihad will also invest an additional $150 million in Jet's frequent flyer programme and spend $70 million to buy Jet's three pairs of Heathrow slots through the sale and leaseback agreement announced in February.

The deal sets a valuation benchmark for further investment in Indian airlines, with budget carrier SpiceJet Ltd frequently the subject of stake sale reports.

As of 9:25 a.m., Jet shares were up 14.3 percent. Spicejet gained 10.5 percent, while Kingfisher Airlines Ltd gained 2.2 percent.

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