Aviation

Jet to run Air Sahara as subsidiary

ETW Staff - Mumbai

Jet Airways according to chairman, Naresh Goyal has reached an agreement with Air Sahara to extend the validity of Share Purchase Agreement (SPA) by 90 days and during this period the two airlines will continue to operate as separate entities. "Till we get the approval from the Director General of Civil Aviation (DGCA), we will run Air Sahara as a 100 per cent subsidiary. It will be merged with Jet Airways at a later date," stated Goyal. Jet Airways has also extended the term of the escrow arrangement signed between both the airlines. The enterprise value of the transaction remains unchanged at around $500 million.

For running Air Sahara as a 100 per cent subsidiary, Jet Airways would have to secure approval of SPA and change the management of Air Sahara. The New Air Sahara board will have five directors: Naresh Goyal, Javed Akthar, Saroj Datta, Vic Dungca and Vijay Kelkar. According to Goyal, the two parties have also agreed that Jet Airways will advance a sum of Rs 500 crore out of the agreed consideration to the shareholders of Air Sahara against the pledge of 100 per cent of Air Sahara's shares. If the agreement terminates, this advance would be repaid to the company. Commenting on the transfer of parking bays and other infrastructure facilities at the airports to Jet Airways following the acquisition Goyal stated that there was no cause for concern. He also said that Jet Airways was keen on the employees of Air Sahara and that both companies will absorb employees.