Jet Airways founder Naresh Goyal and his wife Anita Goyal on Monday resigned from the board of the airline they founded 25 years ago, clearing the way for an immediate bailout of Rs. 1,500-crore by lenders. Naresh Goyal’s exit was a condition set by bankers for the rescue of the cash-strapped airline that has been struggling with grounded fleet and mounting dues to banks, suppliers, pilots and lessors. The banks, led by State Bank of India (SBI), will convert their debt into equity and take a controlling stake in the airline for a token sum of 1 rupee.
Here are 10 things to know:
- Naresh Goyal will no longer be the chairman of the company, Jet Airways said. The airline also announced that the lenders would have two nominee on the board.
- The report of Naresh Goyal’s departure led to a rally in Jet’s shares amid heavy volumes. The Jet Airways stock closed 13 per cent higher, outperforming the broader market which settled around 0.9 per cent lower amid global growth concerns.
- Over 33 lakh shares changed hands on the BSE compared with an average of 9.4 lakh shares traded daily in the past two weeks.
- The lenders, led by State Bank of India (SBI), will convert their debt into equity and take a controlling stake in the airline for a token sum of 1 rupee, Jet Airways said. Jet said the banks will initiate a bidding process to sell their stake in the airline to a new investor and that the process is expected to be complete by the end of June.
- In its regulatory filing post-market hours on Monday, Jet Airways said it had constituted an Interim Management Committee to manage and monitor its daily operations and cash flow.
- Kevin Knight, nominee of Etihad Airways PJSC, also resigned as director from the airline’s board, Jet Airways said.
- The exits come days after reports that the government has asked state-run banks to bail out Jet Airways for the moment to prevent the airline going bankrupt.
- Saddled with more than $1 billion of debt, Jet has struggled to stay afloat. Several lessors have started terminating leases with the carrier.
- Jet Airways has a fleet of 119 aircraft. Of these, 54 aircraft have been grounded due to non-payment of dues. Jet Airways is not flying another 24 planes because of non-maintenance, they added. This means that around two-thirds of the fleet of what was India’s top private airline is grounded for various reasons.
- Aviation regulator DGCA or Directorate General of Civil Aviation had last week said that only 41 of the airline’s aircraft were operational.