'Jet-Sahara deal overvalued'
The sources said that the deal was overvalued as Sahara was incurring heavy operational losses.
By TNN |
NEW DELHI: Jet sources said on Tuesday that Sahara has already leased its aircraft to them which could be held back unless Sahara returns the advance of Rs 500 crore and Rs 80 crore spent on capital expenditure.
Sahara sources told that Jet’s delay in honouring the deal was in ‘‘ bad faith’ ’ as four of its nominees to the Sahara board have already been cleared by government. But Goyal’s clearance is awaited. Sahara sources said: ‘‘ Four directors are enough to take charge of the airline and run it. Goyal can join the board as and when his clearance comes.’’
Jet sources, however, maintained that it made no sense for them to acquire the airline unless its chairman, Goyal, was part of the board. The sources also said that the deal was overvalued as Sahara was incurring heavy operational losses. This perception is also shared by many within the aviation industry. On June 10, Goyal had expressed his ‘‘ genuine and strong concerns over a number of issues relating to operations of Air Sahara’ ’ in a letter to Sahara chief Subrata Roy.
Goyal’s contention is, however, contested by Sahara sources who said Jet did not walk into the deal blindfold. They said that Jet agreed on the price on the basis of a due diligence done by Ernst & Young. They even complained that Jet had not responded to Sahara management’s repeated attempts to meet and sort out the issues, but instead leaked Goyal’s letter to the media.
As ties between the two prospective partners reach a flash point, the government looks to be distancing itself from the tussle. Civil aviation minister Praful Patel — who had earlier welcomed the deal as being ‘‘ good for the Indian aviation sector’ ’ — on Tuesday said, ‘‘ It’s a deal between two corporate entities and the ministry will not get involved.’’
Sahara sources maintained that Goyal’s clearance was not a stumbling block to the deal as the government had in-principle approved the deal by clearing four of Jet’s directors . Officially, Jet Airways refused to comment on the developments.
Sahara sources told that Jet’s delay in honouring the deal was in ‘‘ bad faith’ ’ as four of its nominees to the Sahara board have already been cleared by government. But Goyal’s clearance is awaited. Sahara sources said: ‘‘ Four directors are enough to take charge of the airline and run it. Goyal can join the board as and when his clearance comes.’’
Jet sources, however, maintained that it made no sense for them to acquire the airline unless its chairman, Goyal, was part of the board. The sources also said that the deal was overvalued as Sahara was incurring heavy operational losses. This perception is also shared by many within the aviation industry. On June 10, Goyal had expressed his ‘‘ genuine and strong concerns over a number of issues relating to operations of Air Sahara’ ’ in a letter to Sahara chief Subrata Roy.
Goyal’s contention is, however, contested by Sahara sources who said Jet did not walk into the deal blindfold. They said that Jet agreed on the price on the basis of a due diligence done by Ernst & Young. They even complained that Jet had not responded to Sahara management’s repeated attempts to meet and sort out the issues, but instead leaked Goyal’s letter to the media.
As ties between the two prospective partners reach a flash point, the government looks to be distancing itself from the tussle. Civil aviation minister Praful Patel — who had earlier welcomed the deal as being ‘‘ good for the Indian aviation sector’ ’ — on Tuesday said, ‘‘ It’s a deal between two corporate entities and the ministry will not get involved.’’
Sahara sources maintained that Goyal’s clearance was not a stumbling block to the deal as the government had in-principle approved the deal by clearing four of Jet’s directors . Officially, Jet Airways refused to comment on the developments.
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