Jet Airways on Wednesday said the aviation ministry did not give a go-ahead to the merger proposal of the full service air-carrier, Jet Airways with its subsidiary company Jet Lite.
The airline company in a BSE filing said the civil aviation ministry has not approved the merger of Jet Lite Ltd with itself. As a result, the merger scheme stands cancelled and revoked.
The filing said, "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 merger proposal of the two entities was first announced in 2015 after the board of Jet Airways approved it in September 2015. Later, the proposal got approval from the company's shareholders in April 2016.
In 2016, the airline said, the merger would help to better manage merged entity's cash and "unfettered access to cash flow generated by the combined business which can be deployed more efficiently to maximise shareholder value".
However, the specific reasons due to which the ministry rejected the proposal could not be ascertained as of now.
Jet Airways acquired Sahara Airlines in a deal worth Rs. 1450 crore after an arbitration award in the year 2007. After the acquisition, Sahara Airlines, operating as a subsidiary unit of Jet Airways was renamed Jet Lite.
One of the company's spokesperson says it respects the ministry's decision on the proposed merger scheme.