Jet Airways chairman steps down as banks move in with rescue plan

26 March, 2019, 06:55 | Author: Frank Williams
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According to Reserve Bank of India (RBI) regulations, lenders must resolve cases pertaining to defaulting companies such as Jet Airways within 180 days of their first default. Goyal's wife Anita Goyal and Kevin Knight, a nominee of Etihad Airways, have also resigned. Last week, the State Bank of India, which is leading the bank-led resolution plan for Jet, had asked them as well as two more directors to step down from their positions on the company's board.

Lenders to form an interim management committee to manage and monitor the daily operations and cash flows.

Naresh Goyal, Chairman of Jet Airways speaks during a news conference in Mumbai November 29, 2017.

The board also approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt.

It is likely that the lenders will take over more than 50 per cent of the airline's stake. The carrier defaulted on loan repayments to banks on December 31.

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Goyal is presently in London and could address around 23,000 Jet employees upon his exit from there, the report said. Due to the non-payment of dues, a majority of the airlines business were grounded and it eventually prompted the chairman to step down.

Joint venture partner Eithad's stake will be brought down to 12 percent from 25 percent and Naresh Goyal will now hold 25 percent, Kumar said.

Earlier this year, the airline struck a debt resolution plan with its lenders. Almost 23,000 of Jet's staff including pilots have been unpaid for over two months.

Experts also made it clear that the airline needs a swift capital infusion to stay afloat. Shares of Jet Airways had jumped over 15% on the National Stock Exchange after the news reports, and closed the day at Rs 261 per share. In his absence, Jet Airways CEO Vinay Dube is expected to be at the helm of the beleaguered airlines.

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