Private airliner Jet Airways is looking to revive its deal with Air Sahara at a lower valuation, according to sources. The deal, which was originally valued at Rs2,200 crore, has been struck in the region of Rs1,850 crore, reports CNBC-TV18.

The new deal is likely to include creditors'' balance of Rs350 crore. The new deal includes creditors'' deduction of Rs350 crore. According to hearsay, the airline is expected pay the remaining amount of Rs1,365-Rs1375 crore for Air Sahara. Jet has already paid Rs500 crore as bank guarantee.

The deal may take shape over a period of two to three months. The Indian air carrier was in talks with various new players, including a private equity player.

Though the news of the takeover of Air Sahara by Jet Airways is yet not official, in all probability, it is a struck deal . Nine months after calling it off, Jet Airways is understood to have negotiated a takeover of Air Sahara, at a much lower price than the $500 million (Rs.2300 crores) offered in January 2006.

But financial analysts feel that the merger would strain the profitability and the balance sheet of Jet Airways in the near to medium term, before the merger can fully realize the benefits arising out of the synergies.

However, they are unequivocal in their opinion that the deal is a real steal for Jet Airways.

The take-over has propelled Jet Airways into the Top-500 companies in India. But importantly, this (the deal) will enable Jet to ply over a broader expanse, making it a pan-India network without phenomenal additional investments in logistics and infrastructure. Given that Air Sahara operated of several routes that were different from those of Jet’s, Jet Airways need not make any duplicated investment.

The decision whether the possession and ownership of Air Sahara’s infrastructural facilities will go to Jet, still has to be taken by the DGCA (Directorate General of Civil Aviation). The dry and wet lease agreements and the corresponding tax liabilities also need to be considered, adds Shah.

Sources also inform that both the airliners have reached a commercial agreement and have informed the arbitration panel about the same, added sources.

Meanwhile, the panel has set the Jet-Sahara hearing for 5:30 pm on Wednesday. Jet has only two options - either to buy out Air Sahara or compensate it.