Jet needs Rs 400 cr to turn around Sahara

Mumbai: Jet Airways, which has acquired Air Sahara for Rs 1,450 crore, needs to shell out Rs 800 crore immediately to rejuvenate the loss-making airline and take charge of it.
Of this, Rs 400 crore will go into turning it around operationally by investing in aircraft maintenance, engineering support, spare parts and re-branding. The rest will be part of the payment for the acquisition.
Jet executives said today that the Sahara fleet was poorly maintained and might not meet the safety standards.
"It will be an uphill task to revitalise the fleet of Air Sahara," they said. Jet will also have to relaunch Air Sahara, which will be operated as subsidiary.
Earlier, Jet Airways chairman Naresh Goyal said he would disclose the fund raising plan on April 16, the day it is slated to re-launch its international brand.
The acquisition will further affect Jet's strained balance sheet (its current debt-equity is more than 2). Moreover, Jet plans to acquire 20 aircraft with a total outlay of $2.1 billion. This outlay will result in further leverage.
14/04/07 P R Sanjai/Business Standard

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Categories: Air Sahara Apr 2007, Jet Airways Apr 2007