Air Sahara stake sale hits valuation roadblock

Valuation is turning out to be a stumbling block to Air Sahara's stake sale plan since interested parties are unwilling to match the seller's price expectation.

Air Sahara has reportedly kept the valuation between $750 million and $1 billion. In contrast, prospective buyers are quoting anything between $400 million and $550 million.

Jet Airways, Kingfisher Airlines and SpiceJet have evinced interest in picking up a controlling stake in Air Sahara.

Air Sahara has appointed Ernst & Young as advisor for drafting a blueprint for expansion and fund mobilisation through strategic partners for private equity placement.

According to sources, Jet Airways has quoted around $550 million and could not finalise the deal due to the differences in valuation figures. Kingfisher Airlines' quote was at $400 million.

Earlier, Jet Airways, in a communique to the BSE, had clarified that the company is not in the race for the stake. "The valuation that Air Sahara has fixed is too high. Interestingly, it is going over the roof while earning is coming down drastically. The airlines is likely to post over Rs 20 crore loss this year," the sources said.

Kingfisher Airlines chairman and managing director Vijay Mallya declined to divulge any details. He said, "Kingfisher is still open for acquiring a controlling stake. However, nothing has been finalised."

On how keen SpiceJet was to acquire the stake, a company official said, "We have no comments at this point of time."