Jet Airways founder-chairman Naresh Goyal steps aside

Twenty-five years after founding his private airline Jet Airways, Naresh Goyal will cease to be chairman of the airline as 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.

Lenders will now provide funding support to the tune of Rs1,500 crore by way of an appropriate debt instrument against security of its assets. This will restore normalcy to company's day-to-day operations, the company said in a filing with the exchanges.

The board also approved issue of 114 million equity shares of the company to the consortium of lenders upon conversion of Rs1 of the outstanding debt.

The lenders will also constitute an interim management committee, which will manage and monitor the daily operations and cashflow of the company.

Lenders plan to sell the airline to new investors through a bidding process, 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. The airline was forces to delay payments to vendors, banks, pilots and lessors.

Under the weight of ballooning debt, the airline had to ground nearly 40 of its aircraft.

Je Airways’ partner Gulf-based Etihad Airways, which infused $600 into the airline and pick up a 24 per cent stake, three London Heathrow slots and a major share in Jet's frequent flyer programme, refused to oblige with cash injections.

Jet Airways pilots too, issued a statement threatening to stop flying from 1 April if there is no clarity on the resolution process and salary payment by 31 March.