Jet, Sahara seek settlement out of court

Jet may offer Air Sahara Rs 200 cr  for withdrawing case.

Jet Airways and Air Sahara are exploring an out-of-court settlement of their dispute following the termination of Jet's deal to acquire Air Sahara.

Sahara Airlines Chief Subrata Roy and Air Sahara President Alok Sharma are in Mumbai to meet the brass of Jet Airways for talks on the issue. Both Jet and Sahara executives confirmed a meeting, but refused to divulge details.

It is learnt that Jet Airways will offer Air Sahara Rs 200 crore to for withdrawing its case. However, the terms and conditions of the out-of-court settlement have not been finalised.

Jet Airways had advanced a sum of Rs 500 crore out of the agreed consideration of Rs 2,300 crore to the shareholders of Air Sahara, against a pledge of 100 per cent of Air Sahara's shares, and parked Rs 1,500 crore in an escrow account with the ICICI Bank.

That money is now blocked as the matter is being heard by a court. Jet Airways has already decided to write off the Rs 180 crore spent in the course of the acquisition process.

Earlier, following the termination of the share purchase agreement, Jet Airways and Air Sahara had separately moved courts in Mumbai and Lucknow. At present, the matter is sub-judice.

Air Sahara is planning to invest Rs 100 crore in reviving the airline, after the aborted acquisition deal. Jet Airways posted a net loss of Rs 44.98 crore for the first quarter of fiscal 2007, despite 24.78 per cent growth in the total income from operations.