Jet-Sahara deal airborne again

IN a volte face from its earlier stand last year, Jet Airways has signed an amended agreement to buy Air Sahara at a reduced enterprise valuation of Rs 1,450 crore from the earlier figure of Rs 2,250 crore. The deal was cornered by legal wrangles as Jet Airways had walked out of the deal in June last year. However, Jet has already spent about Rs 180 crore in operating Air Sahara, Rs 1,500 crore in an escrow account, Rs 51 crore as interest on this account and another Rs 350 crore has been spent on various liabilities, putting the actual valuation to be Rs 1,950 crore. The acquisition is on a “as is where is basis” without any warranties and demnities on aircraft, assets or undisclosed liabilities except tax. The fleet size of Air Sahara is now 24 from 27 as three planes have been returned to the lessors. Jet can use the Air Sahara brand for up to six months, after which the rights revert to the Sahara Group.

Courtesy: EconomicTimes