Jet and Sahara kiss and make up - price Rs1,450 crore

13 April 2007

Post-merger, Jet will command about 33-34 per cent of the domestic market.

With Jet already having paid the Sahara Group Rs500 crore, as part of the original agreement, the terms now agreed upon will see it disburse another Rs400 crore to Sahara by April 20. The balance Rs550 crore will be paid out in four annual, interest-free installments, starting March 30, 2008.

The merger is likely to go on record as the biggest aviation deal in the country until the Air-India and Indian deal comes through. This process has already been set into motion by the Government.

With the amicable settlement, the two sides have now brought a nine-month old dispute to an end. Without a settlement Jet Airways faced the prospect of having to pay a huge compensation in the event an arbitration panel passed a verdict against it.

Similarly, Air Sahara too faced the uncomfortable situation of finding new buyers at a time when the domestic aviation industry is passing through a turbulent phase.

The matter was brought before an arbitration panel of British judge Lord Stein and retired Supreme Court justices SP Bharucha and Jeevan Reddy. The panel approved the terms, as brought before them by the two parties.