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Jet scrip hits air pocket

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Our Market Bureau Mumbai
Shares of aviation major Jet Airways have, today, taken a beating on the Bombay Stock Exchange (BSE), even though the Sahara deal was announced in January.
 
The scrip has plummeted 17.55 per cent to close at Rs 948 from a high of Rs 1,150 recorded on the day the deal was made public.
 
In fact, analysts expressed surprise and disbelief over the price Jet was prepared to pay for the Sahara deal. And now the deal is being re-negotiated.
 
Though the value of the deal remains the same, Jet has got an extension of 90 days to make the payment. The root cause behind the hurdle in the merger was a letter by public carrier Indian, which is against the post-merger hand-over of Sahara's airport infrastructure and air route rights to Jet Airways.
 
"It is unlikely that the market will be comfortable till Jet gets all necessary approvals for the merger. Even after that, it will take some evidence that the merger is working to attract investors," said a market analyst.
 
The deal has been facing hurdles since the day it was struck. The country's largest-ever aviation deal "" the takeover of Air Sahara by Jet for Rs 2,300 crore early this year "" also came under the scrutiny of Monopolies and Restrictive Trade Practices Commission earlier this month.
 
Jet's third quarter financials were also not inspiring. Its net profit for the quarter ended December 31, 2005 fell to Rs 61crore from Rs 129.6 crore for Q3 FY04-05, though total income increased to Rs 1,499 crore, from Rs 1,230 crore.

 

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First Published: Mar 25 2006 | 12:00 AM IST

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