The Hindu : Business : Jet Airways-Sahara deal heading nowhere

Online edition of India's National Newspaper
Wednesday, Mar 22, 2006

Business

Business

Jet Airways-Sahara deal heading nowhere

Vinay Kumar

Clearance from DGCA still pending

NEW DELHI: The Jet Airways-Air Sahara deal appears to have hit an air pocket with confusing signals emanating from both the sides over going through the final phase of the Rs. 2,300-crore agreement, the biggest in the Indian civil aviation sector so far.

With the clearance from the Directorate General of Civil Aviation (DGCA) still pending, both Jet and Sahara have little option but to go in for an extension of the March 24 deadline for effecting the transaction. The escrow account set up to facilitate the deal is scheduled to close on March 24, setting off hectic meetings of senior officials and legal experts of Jet Airways with their Chairman, Naresh Goyal, on Tuesday in Mumbai.

On the other side, Air Sahara officials and its President Rono Dutta was holding discussions with the Sahara India Pariwar chief Subroto Roy.

Jet is also said to be waiting for approval from the Government for the share purchase agreement, holding pattern and security clearance of the board of directors sought by Air Sahara.

The Civil Aviation Minister Praful Patel had informed Parliament last week that the Government had not received any request from the airlines for the buyout, though the Ministry of Company Affairs had cleared Jet's proposal for the merger.

Sources in Jet had indicated over the past few days that if they were not likely to get landing and parking rights and slots of Air Sahara, the deal would most likely fall through and it would be better to absorb some losses than going in for total acquisition. Jet officials have also had a hard look at the maintenance and lease schedules of Air Sahara aircraft.

Meanwhile, the Monopolies and Restrictive Trade Practices Commission's (MRTPC) investigative arm has issued notices to both the air carriers seeking details of the proposed acquisition.

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