Financial Daily from THE HINDU group of publications
Saturday, Mar 04, 2006
Financial Daily from THE HINDU group of publications Saturday, Mar 04, 2006 |
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Airlines Corporate - Mergers & Acquisitions Jet gets Ministry nod for buying Air Sahara Richa Mishra
New Delhi , March 3 Jet Airways has moved a step closer towards bringing Air Sahara under its fold. The Ministry of Company Affairs has given its nod to the deal. According to senior officials of the Ministry, the deal has got the nod under the Companies Act, 1956. Jet had approached the Ministry seeking approval under the provisions of the Act that stipulated `restriction on acquisition of certain shares.' Section 108A of the Act provides for Union Government approval, if the nominal value of equity shares intended to be acquired exceeds 25 per cent of the paid-up equity share capital of the company to be acquired. There were no technical hitches in the deal under the provisions of the Companies Act, the official told Business Line. Further, the deal did not come under the purview of the Competition Act, as the relevant provisions of the said Act were yet to be notified. The deal has created concerns among sections of the industry that it could lead to a monopolistic situation, as Jet Airways enjoys a dominant position in the domestic market. Air Sahara enjoys a market share of about 12 per cent. Further, there were no pending issues before the Ministry as regards Jet Airways, the official added. Asked whether the inspection carried out by the Ministry four years ago on the books of accounts of Jet Airways has been closed, the official said, "No issue was pending before the Ministry." The company should now file the necessary papers with the Registrar of Companies. Early this year, Jet Airways acquired Air Sahara for $500 million. As per the deal, Jet Airways would be acquiring the aircraft, equipment and slots at the airports that Air Sahara had, once cleared by the mandatory authorities.
More Stories on : Airlines | Mergers & Acquisitions | Jet Airways (India) Ltd
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