It appears Jet pressed for re negotiation of the price after it spotted undisclosed liabilities to the tune of Rs 75 crore in Air Saharas balance sheet. Hectic parleys between the two focused on two more counts: Air Saharas internal liabilities to the tune of Rs 300 crore and banking liabilities of the order of Rs 122 crore.
The sources said Air Sahara balance sheet was still to be finalised, but the references to the due diligence process and undisclosed liabilities revealed that Jet $500 million price tag may have been higher.
Banking liabilities of Air Sahara relate to some of the loans taken by the company from banks, but still to be fully repaid. These liabilities Rs 122 crore actually reduce the enterprise value of the company to that extent. Internal liabilities relate to a loan of Rs 300 crore extended by Sahara India Commercial Corporation to fund the operations of Air Sahara. The sources said there was a broad agreement now that Jet would pay it back to the Sahara group.
The price renegotiation surfaced after Jet spotted undisclosed liabilities of
Sources close to the deal also admitted the alleged difference of opinion within the top management of Jet Airways on whether the deal made business sense for Jet. They, however, said Jet Airways chairman himself had a strong desire to acquire the rival airline.