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Jet may sweeten Sahara offer

By BS Corporate Bureau in Mumbai
August 16, 2006 11:15 IST
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Jet Airways may increase the compensation offer to Rs 300 crore (Rs 3 billion) to reach an out-of-the-court settlement with Air Sahara.

Sources close to the development confirmed the Jet move to up the compensation amount which was offered at around Rs 200 crore (Rs 2 billion) last week. Senior executives of Jet Airways and Air Sahara were tight-lipped on the issue as the matter was subjudice.

Top brass of Air Sahara and Jet Airways had several rounds of meetings to sort out the issue out of court. But talks were inconclusive due to differences in the compensation amount.

TNV Iyer, former director of Jet Airways and a close associate of Naresh Goyal, is representing Jet while Ernst & Young is Air Sahara's representative.

Sources close to the development said the Sahara group, promoters of Air Sahara, was desperately looking for capital to revive the airline.

The Sahara Group has incurred huge losses in running the airline. On the other hand, Jet wanted to free the amount it had put in the escrow account by putting the impasse to an end.

Jet Airways had agreed to pay Rs 2,300 crore (Rs 23 billion) for acquisition of Air Sahara, dubbed as the country's largest aviation deal.

Of this, Jet Airways had advanced Rs 500 crore (Rs 5 billion) to the promoters of Air Sahara who pledged their 100 per cent stake in the airlines. In addition, Jet Airways had also put Rs 1,500 crore (Rs 15 billion) in an escrow account with the ICICI Bank.

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BS Corporate Bureau in Mumbai
Source: source

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