The government has rejected the proposal for merger of Jet Airways and its subsidiary Jet Lite, Jet Airways said on Wednesday.
The merger proposal was announced by the airline service carrier three years ago after it was approved by the board of Jet Airways in September 2015 and was later cleared by the airline's shareholders in April 2016.
The merger scheme stands revoked and cancelled as the Civil Aviation Ministry has not approved the merger of Jet Lite Ltd with itself, the airline said in a BSE Filing today.
"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.
A Jet Airways spokesperson said it respects the ministry’s decision even as the reasons for the rejection of approval for the merger could not be immediately ascertained.
In April 2007, Jet Airways had acquired Sahara Airlines for Rs 1,450 crore 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.
(With inputs from agencies)