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Jet Airways to buy Air Sahara, completes largest private airline merger in India

04/17/2007| 3:31:00 PM| 中文

Jet Airways India Ltd and Air Sahara have settled their disputes with regard to the Share Purchase Agreement. (4/13/2007)

Jet Airways India Ltd and Air Sahara have settled their disputes with regard to the Share Purchase Agreement. (4/13/2007)

Jet has agreed to acquire all the shares of Sahara Airlines Ltd for a lumpsum price of US$322 million (Ł171m). US$111 million has already been paid. US$89 million is payable immediately no later than April 20, 2007. The balance US$122 million is payable in four interest free annual equal instalments commencing on or before March 30, 2008.

At the current interest rate, the NPV of the lumpsum price is in the vicinity of US$267 million.

Jet Airways’ Chairman Naresh Goyal said, “It is a good deal, which is commercially a very good one for our shareholders. There is no change in our thinking from the position of January 2006 and, in fact, it is 40 percent cheaper than the deal signed then.”

The takeover will create the largest private airline in the country having a fleet size in excess of 80 aircraft and around 42 percent of the market share. Jet will also pick up Air Sahara’s Heathrow landing slots and become the only private Indian airline to fly international routes.

Jet Airways had offered Ł265m last January for its smaller competitor but later haggled over the price, leading to a fall out between the two carriers. Both managements now say they have reached an “amicable” sale.

Analysts are still advising caution and claim that Jet’s decision was motivated by the fact it faced up to Ł60m in penalty fees if it did not buy Sahara.

“I think the sale was based on legal compulsions. It is still a high valuation which will cause problems in the short-term,” Centre for Asia Pacific Aviation’s Kapil Kaul told media.
TAGS: Jet Airways | Air Sahara | Centre for Asia Pacific Aviation
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