Paving the way for mergers and acquisitions in the Indian aviation industry, including the Jet-Sahara deal, a high-level official committee approved the transfer of all properties of one company to the other.

The aircraft acquisition committee cleared new guidelines on mergers and acquisitions, allowing 100 per cent transfer of properties of one company to the other, including issues relating to aircraft, routes, parking bays and slots, official sources said.

This removes the most important obstacle in the way of the Rs 2,300 crore acquisition of Air Sahara by Jet Airways.

The new guidelines on mergers and acquisitions ‘will be out next week’ after they get the final nod from Civil Aviation Minister Praful Patel, a source said, adding that these would be sent to the Ministry ‘very soon’.

The Committee, which includes officers of the Civil Aviation Ministry, Directorate General of Civil Aviation and Airports Authority of India, said the company which takes over another would not be allowed to further transfer or lease these rights to a third party, the sources said.

Patel had earlier made it clear that "best international practices will be followed in regard to mergers and acquisitions".

The guidelines would also enable the proposed merger of national carriers Air-India and Indian.

This merger would enable the national carriers to not only face domestic competition from the Jet-Sahara deal, but also take on the global challenge, especially from large airlines operating in the region like Singapore Airlines, British Airways, Malaysian Airlines and Emirates.

Jet Airways and Air Sahara had a week ago decided to extend the terms of their share purchase agreement by 90 days without changing the enterprise value, after it became clear that the latter would not be able to get the necessary clearances from DGCA before March 24, when the Escrow account opened for the purpose was to expire.

After the January announcement of the acquisition of Air Sahara, Jet Airways had opened the Escrow account to complete the transaction and had made an initial payment of Rs 120 crore for the takeover.

Sources said the two airlines would now have to move an application before the Civil Aviation Ministry to formally inform it of the acquisition and get the final clearance, which would be on the basis of the fresh guidelines.

( www.financialexpress.com)