Jet-Sahara: Who's debt is it anyway?

Who's the beast of burden? Naresh Goyal's Jet or Subroto Roy's Sahara? This depends on who has agreed to bear Sahara's Rs 550 crores of debt and losses combined. Sahara says it's Jet's problem.
As per the new deal Jet will pay Sahara a total of Rs 1450 crore, versus the previous deal amount of Rs 2200 crores.
But Sahara sources say this Rs 1450 crore is only the equity value of the deal. Sahara has run up liabilities of Rs 550 crore, which when added takes up the enterprise valuation and hence deal value to Rs 2000 crores.Also, the new deal excludes Sahara assets worth Rs 120 crore. Net net, Sahara says, the new deal is almost the same as the old deal.
Jet Airways Chairman, Naresh Goyal says, they have got a 40% discount. Jet sources claim Sahara will pay for the Rs 550 crore liabilities, and all it has to pay is the decided amount of Rs 1450 crores.
Jet is also gloating about the fact that it will pay Rs 550 crores over four annual installments - all interest free. That saves it about Rs 50-60 crores in interest. Besides, some of that money could be funded from Sahara's operations.
14/04/07 Moneycontrol.com

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Categories: Air Sahara Apr 2007, Jet Airways Apr 2007