India's Jet sees shares slump on Etihad delay claim

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(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

Shares of Jet Airways India Ltd dropped as much as 5.8 percent on Thursday after Reuters reported a stake sale to Abu Dhabi's Etihad Airways could be delayed until at least August, two dealers said.

The delay could come as Etihad is seeking assurances following setbacks for several Gulf investors in India, two sources familiar with the talks told Reuters.

Jet shares were down 3.2 percent as of 0400 GMT.

Etihad, which is expanding globally, has been in talks over an equity stake in Jet since September after India relaxed ownership rules and allowed foreign airlines to buy up to 49 percent in local carriers.

The Gulf airline is eyeing a 24 percent stake, valued at about $330m, according to sources aware of the matter.

The deal, which would inject much-needed funds into Jet and help Etihad expand its reach into the vast Indian aviation market, has slowed over concerns of past failed forays by Gulf investors into India and the Abu Dhabi firm's demands to protect its potential investment, the sources said, speaking on condition of anonymity as the matter is not public.

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