Jet Airways to pay Rs 500 crore to Air Sahara

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New Delhi, Mar 24: Jet Airways has committed to pay immediately Rs 500 crore as owners of the two airlines agreed to extend the share purchase pact by 90 days.

The decision to pay Rs 500 crore against the final payment besides an advance payment of Rs 120 crore already made by Jet in January was taken at a high-level meeting between Jet Airways chairman Naresh Goyal and Sahara group chief Subroto Roy here yesterday, sources familiar with the development said today.

Contrary to speculation that it was seeking to revise downward the value of Air Sahara, Jet Airways' move to make part payment till the pendency of other issues demonstrates its strong desire to acquire the rival airline which would give it a dominant near 50 per cent market share in domestic traffic.

After the conclusion of talks, in which the enterprise value of Air Sahara was kept unchanged at 500 million dollars (about Rs 2,300 crore), Mr Goyal told reporters in Mumbai: ''We believe in the deal and we believe it is good for Jet Airways. There is no question of desperation at all.'' He added that extension of the deadline for completing the transaction by 90 days from March 24 was decided as it was good for industry, consumers and Jet Airways's shareholders.

Mr Goyal said the two airlines are hoping to get all the regulatory approvals within 60 days and the share purchase agreement terms have now been extended by three months, believing that all the clearances would be acquired.

''Nothing has changed. Both parties agreed. The enterprise value remains the same,'' he said.

Sources in Sahara said that they had been maintaining that the deal would be through and only change could be in the transaction period. The same was decided yesterday without altering the value of the deal, they added.


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