The Hindu : Business : Jet to pay Rs. 500 cr. advance to Air Sahara

Online edition of India's National Newspaper
Saturday, Mar 25, 2006

Business

Business

Jet to pay Rs. 500 cr. advance to Air Sahara

Special Correspondent

NEW DELHI: Jet Airways on Friday announced that it would be making an advance payment of Rs. 500 crore towards the acquisition of Air Sahara. The two private carriers agreed to give an extension of three months for finally sealing the deal, the biggest in the Indian civil aviation history.

"Air Sahara will be a 100 per cent subsidiary of Jet. There is no change in our position. There has not been any rethinking on the deal. There will also be no devaluation of the deal,'' Jet Airways Chairman Naresh Goyal told reporters after concluding discussions with Sahara Parivar Chief Subroto Roy.

Enterprise value

Jet has already paid Rs. 100 crore working capital expenditure to Air Sahara and soon will be paying another Rs. 500 crore for 100 per cent stake. "There is no change in enterprise value and it is $500 million,'' he said. The extension of 90 days will give ample time for obtaining all necessary guidelines for mergers and acquisitions as well as clearances from the Directorate General of Civil Aviation.

Jet Airways in a brief statement said, "The term of the Escrow arrangement has also been extended by 90 days. The two parties have agreed that Jet Airways will advance Rs. 500 crores out of the agreed consideration to the shareholders of Sahara Airlines Limited against the pledge of 100 per cent of Sahara Airline's shares. If the agreement terminates, this advance will be repaid to Jet Airways. During this extended term, the two airlines will continue to operate as independent entities.

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