Jet Airways shares slide on High Court ruling
India's Bombay High Court requested Jet Airways pay INR4.78 billion (USD107.8 million) in dues to Sahara India Commercial Corp within two weeks after the court ruled that the airline defaulted on payment obligations in its acquisition of Sahara Airlines. Shares in Jet Airways fell 4.7% on 04-May-2011.
The High Court rejected the full INR20 billion (USD450 million) sought by Sahara Airlines Ltd. The net cash outgo for the company will only be INR1.16 billion (USD26 million), according to Jet Airways Senior VP Finance M Shivkumar.
In 2007, Jet Airways acquired Air Sahara for INR14.5 billion (USD327 million) and both parties have since been engaged in a legal battle over payment issues. Jet Airways has already deposited INR2.75 billion (USD62.0 million) with the court in instalments, Mr Shivkumar said. Jet Airways' remaining payment of INR2.03 billion (USD45.8 million) includes INR870 million (USD19.6 million) the airline had paid to the tax authorities as the deducted amount, which has recently been refunded to the airline. Air Sahara has subsequently been renamed JetLite.