The Hindu Business Line : The saga of a historic civil aviation deal

IT was something like what one saw in the movies. At around 6.30 Wednesday evening, a personal Boeing Business Jet (BBJ) belonging to Mr Subrata Roy of the Sahara Group took off from the Mumbai airport on a flight to Lucknow. On board was not Mr Roy, but Mr Naresh Goyal, the Chief of Jet Airways, and 12 others and in less than two hours, a historic civil aviation deal was through.

While the back-room boys did all the spadework, the two corporate honchos just tied up the loose ends and put their signatures on the cover page of the bulky agreement. Having done that, the two moved on to a dinner hosted by Mr Roy, leaving senior executives to handle the rest. .

The agreement that Jet Airways had inked was to purchase Air Sahara for a consideration of $500 million. The agreement would see Jet Airways acquire 27.6 crore equity shares (with a face value of Rs 10), five crore preferential shares and the Group loans.

"There were mountains of agreements to be signed. The cover page of the agreement, which contained the shareholders' agreement, was signed by Mr Naresh Goyal and Mr Subrata Roy. At the ceremony both spoke of their admiration for each other. In fact, Mr Goyal also said that he would continue to look towards Mr Roy for assistance and guidance in the future," a source who witnessed the signing of the agreement told Business Line.

Having finished dinner and a $500-million deal, all in the space of one evening, Mr Goyal and his team were back at the Lucknow airport a little after 11 p.m. to board the BBJ that flew back to Mumbai.

The agreement is to see the entire aviation business of Air Sahara including some of aircraft leases, real estate like the lounges run by it and assets like auxiliary power units and engines, being taken up by Jet Airways.

However, some other investment with Air Sahara including helicopters, the personal BBJ, some advances and the contract with the Board of Control for Cricket in India (BCCI) are to be carved out and sold back before the transaction happens.

However, the marriage between the two airlines will be consummated only after the authorities approve it. "The licence agreement given to any airline has a clause that any change in management control or shareholding needs the approval of the Directorate-General of Civil Aviation (DGCA). Therefore, till that is granted the two airlines will remain as separate entities," a senior Government official said.

Besides, the agreement will also need the nod of the lessors and lenders before it can come into force, sources indicated.

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