Jet-Sahara deal under a cloud

With just two days left for the the deadline of Air Sahara merger with Jet Airways, some crucial clearances are still pending.

The Directorate General of Civil Aviation (DGCA) is yet to clear Jet Airways' bid to buy the entire stake in Air Sahara for $500 million.

The home ministry has not yet cleared the appointment of Jet Airways chairman Naresh Goyal on the Sahara board. And the aircraft acquisition committee has not yet cleared the transfer of Sahara's aircraft to Jet.

Jet Airways executive director Saroj K Datta was not available for comments. However, a source close to the development said, "Top executives from Jet Airways and Air Sahara are convening meeting in London to streamline the merger. There are also talks on extending the escrow account in case the airline fails to secure green signal from DGCA." A senior DGCA official said, the "clearance has not yet been given to merger of two airlines."

On whether the go-ahead signal will be given in two days time, the DGCA official declined to comment.

Sources said, the critical issue would be getting pending approvals rather than securing clearances from the ministry of home affairs for Naresh Goyal to be on the Air Sahara board.

"Jet Airways is in process of making alternate plan to replace Naresh Goyal with some other senior Goyal's close aide for the time being. Goyal will be inducted as soon as the clearance is in place," they added.

According to the DGCA sources, the aviation regulator is awaiting the ministry of home affairs to clear the five member board of Air Sahara after the merger.

The home ministry has cleared only four Jet Airways nominees - out of a total five - on the Air Sahara board.

PTI adds: The escrow account deadline was extended by three months in March and Jet Airways had paid a further advance of Rs 500 crore (Rs 5 billion) to keep the deal on.

Rebutting speculations that the deal may fall through, senior Jet officials said: "We still have two more days and the two sides could look for all the available options."

When contacted, Saroj Dutta, executive director Air Sahara told PTI in Mumbai: "The deal is on and if there are problems we would look into these."

Sources in the Sahara Group, meanwhile, indicated that one of the options could be a further extension of the deadline of the escrow account.

Rumours about the deal coming under pressure intensified after reports that the government had not cleared the name of Jet chief Naresh Goyal for the board of Sahara.

Jet Airways has been virtually operating Sahara Airlines since April.

Additional inputs: PTI