Jet Airways buys Air Sahara for Rs 1450 crore

Finally, the deal has been sealed. Jet Airways has agreed to buy out Sahara Airlines for Rs 1450 crore. Both Jet and Sahara have submitted their proposal to the Arbitrators. Hence, it is curtains down for the largest deal in Indian aviation history with Naresh Goyal led Jet Airways taking over the airline services of Air Sahara. While market analysts termed the deal as “expensive”, Jet Airways is bullish about getting larger market share, greater domestic and international footprint in terms of providing air travel services. Jet will enjoy the rights on brand Air Sahara for first six months while it would be returned to Sahara group after that. After having exited the airline services, Air Sahara would operate helicopter services under its own ‘Air Sahara’ brand. Meanwhile, the Jet Airways informed BSE that the Company and Sahara Airlines have settled their disputes with regard to the Share Purchase Agreement of January 18, 2006.

Jet said that it has agreed to acquire all the shares of Sahara Airlines for a lump-sum price of Rs 1450 Crore. Rs 500 Crores has already been paid. Rs 400 Crore is payable immediately no later than April 20, 2007. The balance Rs 550 Crore is payable in four interest free annual equal instalments commencing on or before March 30, 2008. At the current interest rate, the NPV of the lump-sum price is in the vicinity of Rs 1200 Crore. At 3 pm, the Jet Airways stock shot up by 3.3 percent to Rs 629.10. The deal was signed after the panel comprising British judge Lord Stein and Supreme Court Justices S P Bharucha and Jeevan Reddy, vetted the draft proposal prepared by Jet and Sahara. The two later submitted a revised and final proposal to the three-member court-monitored committee, sources close to the development said. Soon after the deal was signed, a beaming Jet Chairman, Naresh Goyal, said: "It is a good deal which is going to help us."

Courtesy: PTI

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