Jet, Air Sahara reach understanding
Both agreed to extend the terms of share purchase agreement by 90 days without changing the enterprise value.india Updated: Mar 23, 2006 23:53 IST
In a bid to salvage the biggest Indian aviation deal of Rs 2,300 crore take over by Jet Airways of Air Sahara, the two airlines on Thursday agreed to extend the terms of share purchase agreement by 90 days without changing the enterprise value.
The agreement was reached between the two sides after marathon meetings for last two days where both Sahara group Chief Subrata Roy and Jet Airways Chairman Naresh Goyal were involved directly.
"Jet-Sahara agreed to extend the terms of share purchase aggreement by 90 days. Enterprise value remains the same," Goyal and Roy said in a joint statement on Late Thursday night.
The deal had come under pressure owing to necessary clearances from Directorate General of Civil Aviation before tomorrows deadline for completing the transaction.
The announcement follows prolong period of uncertainty amidst speculation that Jet Airways was devaluing their offer price by Rs 1,000 to 1,100 crore.
The negotiations between the two sides had started afresh after it became clear that Air Sahara would not be able to get clearance from DGCA on restructuring of Board, share purchase agreement and other infrastructure changes before the expiry of escrow account on March 24.
After the January announcement of the acquisition of Air Sahara, Jet had opened an escrow account for completing the transaction and had make an initial payment of Rs 120 crore for the take over.
Speculation that the deal may turn sour had been triggered by an announcement by Civil Aviation Minister Praful Patel earlier this month that government was not informed about the deal.
The 90 days time was expected to help the government to firm up its proposal, put forward by Civil Aviation Ministry, to merge Indian and Air India to take on growing competition in the civil aviation sector.