Jet Airways on Wednesday said the government has not given approval for the merger of its subsidiary Jet Lite with itself, nearly three years after the proposal was announced by the full-service carrier.
The merger proposal was approved by the board of Jet Airways in September 2015 and was later cleared by the airline’s shareholders in April 2016.
In a BSE filing, the airline said the civil aviation ministry has not approved the merger of Jet Lite Ltd with itself. Consequently, the merger scheme stands revoked and cancelled, it added.
“Jet Lite (India) Ltd and Jet Airways (India) Ltd shall continue their respective operations as two separate legal entities with their respective Air Operator Certificates,” the filing said.
The specific reasons for the rejection of approval for the merger could not be immediately ascertained.
Sahara Airlines was renamed as Jet Lite.
A Jet Airways spokesperson said it respects the decision of the ministry on the proposed scheme of merger.
In April 2007, Jet Airways had acquired Sahara Airlines for Rs 14. 50 billion after an arbitration award and the latter was renamed as JetLite.
The merger would lead to greater efficiency in cash management of the merged entity and “unfettered access to cash flow generated by the combined business which can be deployed more efficiently to maximise shareholder value”, the airline had said in April 2016.
Shares of Jet Airways declined 2.36 per cent to close at Rs 499.80 apiece on the BSE.
Source: Business-Standard