File photo of Naresh Goyal | Jasper Juinen/Bloomberg
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Mumbai: Jet Airways Founder and Chairman Naresh Goyal and his wife Anita Goyal will step down from the board of the ailing airline, which will also receive an immediate funding of Rs 1,500 crore under a resolution plan piloted by its lenders.

Goyal would also cease to be the Chairman of the full-service carrier, which has been flying for more than 25 years, according to a regulatory filing.

After weeks of speculations and uncertainties over the future course of Jet Airways, which has grounded over 80 planes due to financial woes, the airline’s board Monday approved a resolution plan formulated by SBI-led domestic lenders.

Naresh Goyal, his wife Anita Goyal and Etihad Airways PJSC’s nominee director Kevin Knight would step down from the board.

Gulf carrier Etihad holds 24 per cent stake in Jet Airways.

According to the filing, two nominee directors of the lenders would be inducted.

Further, an immediate funding of up to Rs 1,500 crore would be provided to the cash-strapped airline by “way of issue of appropriate debt instrument”, the filing said.

Appropriate security would be created over the company’s assets for securing the existing facilities extended by the lenders to the airline, which has a debt burden of more than Rs 8,000 crore.

As many as 11.4 crore equity shares would be issued to the lenders upon conversion of debt.

The board also approved “constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the company,” the filing said.

Shares of the airline zoomed 12.69 per cent to close at Rs 254.50 on the BSE.


Also read: A bailout for Jet Airways will fill Indian skies with zombie airlines


 

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  1. Somehow one fears this may not be good enough. Unless the Goyal family was siphoning off large sums of money, difficult to see how someone could do a better job of running Jet than Mr Naresh Goyal. Etihaad bailing out is a huge vote of no confidence in the viability of the enterprise. Compared to what has been wasted on Air India, the exposure to Jet is still modest. However, if the business model is broken, the inevitable is being postponed, beyond the general election, to begin with. The bandwidth to helm / mentor the Indian economy is just not there.

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