Jet Airways is making an advance payment of $112 million towards the acquisition of Air Sahara, even as the two sides agreed to extend the transaction period by three months. This ends the uncertainty over the fate of India’s biggest aviation deal worth $515 million.
“Air Sahara will be a 100 per cent subsidiary of Jet so that we can enjoy all the infrastructural facilities presently with it, as we need approval from the High Court for the merger. Till that time Air Sahara will be our subsidiary,” Jet Airways Chief Naresh Goyal told reporters a day after concluding discussions with Sahara Chief Subroto Roy.
Contrary to speculation that he was seeking a devaluation of the deal by an estimated Rs 10 billion, Goyal told the Press Trust of India: “I have paid Rs 1 billion working capital expenditure to Air Sahara and soon will be paying another Rs 5 billion for 100 per cent stake in lien with ICICI bank.”
“There is no change in enterprise value and it is US $500 million,” he said, adding that the two sides had agreed for extension by 90 days, the deadline for concluding the deal.
By that time, the government should come up with all necessary guidelines for mergers and acquisitions in the aviation industry, he hoped, while attributing the dip in Jet share prices, which on Monday touched its lowest level since it came up with an IPO last year, to the uncertainty over the deal.
Goyal said at that time “we did not have any clarity and we didn’t inform the exchanges, as we were going through negotiations with Sahara Management. Now we have clarity and there is no problem in the deal.”