Thursday, June 22, 2006

Jet-Sahara deal falls apart

New Delhi: The deal worth Rs 2300 crore - the biggest in Indian civil aviation sector collapsed five months after it was announced.
After operating Sahara for some time, Jet was apparently unhappy with its liabilities and sought a discount on the deal.
Air Sahara refused to renegotiate the price sparking the collapse as the acquisition deadline ran out at midnight.
Air Sahara resumes operations

New Delhi: The Sahara group resumed charge
of Air Sahara from midnight on Wednesday
and started normal operations. Sahara
resumed the charge after the expiry of deadline
for transaction of acquisition of Air
Sahara by Jet Airways. When contacted a
Sahara Group official said: "We have resumed
charge and have started operating the airline
from midnight last night."
22/06/06 Times of India
The balance sheet of Air Sahara indicates a financial mess, which is believed to have led Jet Airways to change its mind in the deal.
At the time of the deal Sahara's losses ran up to Rs 226 crore and within two months of the takeover between 19 January and 23 March Sahara saw losses of about 164 crore.
Jet Airways also discovered that between September 2005 and January 2006 Sahara's liabilities had grown to Rs 443 crore from just 238 crore.