At last, Goyals step down from Jet board

Lenders to get 11.4 cr fresh shares; to infuse Rs15 bn

MUMBAI: The weeks-long worrying uncertainty on the way forward for the cash-strapped Jet Airways has been resolved at today’s board meeting through a couple of crucial decisions including the unseating of the founder Naresh Goyal (seen in the picture) as chairman and board member.

In a regulatory filing to the stock market apprising of the board decisions, Jet Airways said Naresh Goyal’s wife Anita Goyal as well as the Etihad member will also step down from the board of the airline, which was founded by the Goyals more than a quarter century ago with much fanfare.

The board that approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt has constituted an interim management committee at the instructions of the lenders to manage and monitor the daily operations and cash-flow of the company.

An immediate funding support of up to Rs1500 crore by lenders by way of issue of appropriate debt instrument against security of its assets has been approved and this is expected to restore normalcy to company’s level of operations.

The resolution plan was formulated by a consortium of domestic lenders led by State Bank of India (SBI) in accordance with the guidelines set out under the ‘February 12’ circular of Reserve Bank of India (RBI).

A bidding process will be soon initiated by lenders for sale/issue of shares to new investor(s), which is expected to be completed in June quarter.

Numerous unconfirmed reports have been doing rounds involving Goyals as well as Etihad, which had bought 24 per cent stake for $600 million in the then glamorous airline about six years ago.

The embattled Jet, once the face of the growing private sector airline industry in India, has been struggling to stay afloat for a few months now. The company had to hang its head due to the non-payment to lessors leading to grounding of about 40 planes in the past few weeks.

The other airlines had started poaching Jet’s staff, especially its pilots as the salaries were not paid. Despite the sorry state of the airline, Naresh Goyal left no stones unturned in the search for fresh funding, but the efforts turned out to be of no avail.

 

 

 

 

 

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