Jet Airways (India) Ltd paid the promoters of Sahara Airlines Ltd Rs400 crore on Friday, bringing the total payments on the cash component of the acquisition up to Rs900 crore. The payment also legally sealed an agreement between the two companies under which Jet Airways will buy Air Sahara for Rs1,450 crore, after a failed merger attempt in 2006.
Soon after the amount was paid, Air Sahara president Alok Sharma announced he had quit his post but would be available for effecting a smooth transition of the airline and continue to work with the parent group, Sahara India Parivar.
Jet Airways officials, led by chief commercial officer Garry Kingshott, went to Air Sahara headquarters to give effect to the amalgamation process. Kingshott is tipped to head the purchased airline, renamed JetLite.
The first payment for the acquisition was the Rs500 crore that had remained in an escrow account at the centre of a legal row between Air Sahara and Jet Airways.
The remaining Rs550 crore will be paid in four separate instalments between March 2008 and 2011.
Jet informed the Bombay Stock Exchange it has effected closure of the share purchase agreement of January last year between it and the selling shareholders of Sahara, by paying Rs400 crore and acquiring 100% of the issued, subscribed and paid-up share capital of the Lucknow-based airline.