Twenty-five years after founding private airline Jet Airways, Naresh Goyal and his wife Anita Goyal have stepped down from the board of the company. Naresh Goyal will also cease to be the chairman of the airline.
This is part of the resolution plan put in place by a consortium of domestic lenders led by State Bank of India. The resolution plan, under the guidelines of Reserve Bank of India’s ‘Revised Framework for Resolution of Stressed Assets’, would require Naresh and Anita to step down from the board.
As part of this, lenders will now create funding support of Rs 1500 crore by way of issue of appropriate debt instrument against security of its assets. In a filing to the exchanges, the company said that this will restore normalcy to Company’s level of operations.
The board also approved issue of 11.4 crore equity shares of the company to the consortium of lenders upon conversion of Rs 1 of the outstanding debt.
The lenders will also constitute and interim management committee, which will manage and monitor the daily operations and cashflow of the company.
A bidding process will be initiated for new investors, which is expected to be completed in the June quarter.
Jet Airways, which was founded by Naresh and Anita back in 1993 ran into debt amounting to over $1 billion. There were delayed payments to vendors, banks, pilots and lessors, which resulted in the airline having to ground nearly 40 of its aircraft.
The last time Jet was suffering with ballooning debt, Etihad Airways infused $600 into the airline and pick up a 24% stake, three London Heathrow slots and a major share in Jet’s frequent flyer programme.
Last week, the pilots of the airline too, issued a statement threatening to stop flying from April 1 if there is no clarity on the resolution process and salary payment by March 31.
