Resuscitating a deal that appeared headed for certain failure, Jet Airways on Thursday said it would buy smaller rival Air Sahara for a lump sum of Rs 1,450 crore, while the enterprise value was close to Rs 2,000 crore.
Under the renewed offer approved by arbitrators, all shares of Air Sahara will be transferred to Jet for Rs 1,450 crore inclusive of the Rs 500 crore, which Jet has already paid last year.
"It is a good deal which will help us...The deal is 40 per cent cheaper than the one (Rs 2,300 crore deal) signed last year," Jet Chairman Naresh Goyal told reporters here.
"The deal has been closed on as is where is basis... we believe that its a win-win deal for both the airlines and their promoters," Air Sahara President Alok Sharma said at a press conference in the national capital.
On the confusion about the deal size due to varying reports, he said: "The deal is closed at an enterprise value of close to Rs 2,000 crore and some adjustments of about Rs 500-odd crore were made."
According to the deal approved by a three-member arbitration panel, Rs 400 crore will be paid by Jet to Sahara before April 20 and the remaining Rs 550 crore in four interest-free annual equal instalments beginning on or before March 30, 2008.
Jet, in a communique to the Bombay Stock Exchange, said the two carriers have settled their dispute with regard to their share purchase agreement of January 18, 2006.
Sharma said the Air Sahara brand would be returned to Sahara Group over a period of time and also that the Lucknow-based group was committed to absorbing the airline's employees, if required.
When reporters persisted with questions on the actual deal value, Sharma said: "We are bound by some confidentiality clause... Sorry, I cannot go into details."
Earlier, Goyal said more details on the deal would be made public on April 16 and that the deal was "commercially good" as he had mentioned in January 2006.
The counsel for Jet Airways, Harish Salve said that the airlines have ended the dispute amicably and the deal was back in the skies.
"We don't like fighting and the dispute is now a thing of the past," Salve said.
The deal was signed by Saroj Dutta of Jet Airways and Pallav Agarwal, who represented Air Sahara.
Earlier, the two airlines submitted their draft proposal to the arbitration panel comprising British judge Lord Stein and Supreme Court Justices S P Bharucha and Jeevan Reddy.
After the arbitrators cleared the proposal, the two then submitted a revised and final proposal to the three-member court-monitored panel.