PTI

Lucknow/Mumbai, Jun 22: The Rs 2,300 crore acquisition of Air Sahara by bigger rival Jet Airways collapsed at the stroke of midnight on Wednesday, five months after the biggest deal in Indian civil aviation sector was announced.

While there was no formal announcement from Jet Airways as the deadline passed, Air Sahara President Alok Sharma said in New Delhi late on Wednesday night that if there was no response from the rival carrier, Sahara group would take back control of Air Sahara operations.

Sahara had offered to extend the deadline for completing the transaction by 15 days but ruled out renegotiating the deal value, which Jet wanted to be reduced by 10-20 per cent.

Absence of regulatory clearances had also played spoilsport with the deal, for completion of which Sahara had insisted that Jet needs to have "requisite clearances."

While four Jet directors secured clearance to join Sahara's Board, Jet chief Naresh Goyal had failed to get the go ahead from the Directorate General of Civil Aviation.

The end of the deal capped a series of developments today that saw the two aviation rivals approach courts in Mumbai and Lucknow seeking to restrain each other from withdrawing money deposited in the escrow account opened with ICICI Bank.

With this, management control of Air Sahara, which was being virtually run by Jet for the past few months, would be restored to Subroto Roy's Sahara Group.

"Wish us luck, Air sahara is on its own from tomorrow," Sharma said.

Sources in Sahara said that Jet had developed cold feet, was non-cooperative and resiling from the contract unilaterally, even as the aviation industry was abuzz with reports that Sahara would seek damages from Jet for loss of business, name and money because of the merger episode.

"We did cooperate in getting security clearances for four of Jet's directors to join Air Sahara Board," a senior Air Sahara official said.

Air Sahara also accused Jet Airways of ruining its name as before the announcement of this merger on January 18, the former was giving a stiff competition to the bigger rival.