India's Jet Airways will sell a minority stake to fast-growing Abu Dhabi-based carrier Etihad Airways for roughly $379 million after months of negotiations.
India's largest airline by market share said in a brief statement to the stock exchange that its board approved the allotment to Etihad of 27.3 million shares at 754.74 rupees each on a preferential basis.
The price represents a 31.7 percent premium to Jet's closing share price on Tuesday. Indian markets were closed on Wednesday.
No other details were immediately available but two sources involved in the deal who declined to be identified said the shares would be newly issued, and would represent 24 percent of Jet's expanded share capital.
If completed, the investment would be the first by a foreign carrier into an Indian airline since the country relaxed ownership rules in September and allowed foreign carriers to buy up to 49 percent in local carriers, which are battling stiff competition and high operating costs.
The deal would give Etihad a bigger foothold in India, a fast-growing but challenging market, and provide Jet with cash to retire debt and give it a partner with global expertise.
"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.
Kaul said Jet would benefit from strategic expertise, cheap financing and possible fuel import benefits in addition to the capital injection.
The deal is subject to regulatory and shareholder approval.
No other details were immediately available. Officials from both Jet and Etihad did not have immediate comment.
Etihad has negotiated stake purchases in four foreign airlines including Air Berlin, Virgin Australia, Aer Lingus and Air Seychelles.
The airline is expanding quickly as it looks to compete with regional rivals Emirates and Qatar Airways.