Private carrier Jet Airways will, within two weeks, finalise a developer with whom it will jointly develop its Bandra Kurla Complex (BKC) land, which the carrier bought from Mumbai Metropolitan Regional Development Authority (MMRDA) in 2006 for R399 crore.
Jet had plans to shift its headquarters to BKC, from the existing SM centre at Andheri, in order to save at least R12 crore towards annual lease rentals. However, the global economic slowdown of 2009 forced the airline to change its decision.
In an analyst call on Friday after the March quarter results, M Shivkumar, senior vice-president-finance at Jet, without naming the developer, said that the airline will complete the sale deal with a developer within two weeks.
Shivkumar said that previously, the airline could not go ahead with the BKC land deal since it was embroiled in a legal battle with the Sahara Group from whom Jet had bought erstwhile Sahara Airlines in 2007 at R1,450 crore. Jet had paid R900 crore upfront and for the remaining, it was to pay in four equal yearly instalments beginning March 2008.
However, while paying its instalments to Sahara, Jet deducted R37.50 crore while paying its first instalment and R50 crore while paying the second instalment. This was done after the income-tax department raised a tax demand of R107 crore on the then Sahara Airlines, which Jet claimed, is for a period prior to its takeover of Sahara.
In March 2009, Sahara filed a petitioned in the Bombay High Court claiming that Jet had defaulted on its payments and is liable to pay R2,000 and not the re-negotiated amount of R1,450 crore. However, the Bombay high court on May 3 pronounced that the liability was of R1,450 crore. Justice DY Chandrachud, however, directed Jet to make payment of R478 crore based on a principal pending amount R402 crore plus 9% interest to Sahara within two weeks.