Jet Airways founder Naresh Goyal to step down as chairman
01 Mar 2019
Naresh Goyal, founder and chairman of Jet Airways, has finally agreed to step down as chairman and allow the board to move ahead with a debt recast plan for rescuing the cash-strapped airline, reports citing sources close to the development said.
He would, however, continue to be a part of the company in some capacity even after stepping down as chairman. The decision comes after a meeting of lenders that continued past midnight on Thursday .
Goyal, who founded the full-service carrier 25 years ago, has also agreed to reduce his 51 per cent stake.
Jet Airways has defaulted on loans and has not paid pilots, leasing firms and suppliers for months as its debt problem mounted.
Jet could not hold on amidst rising oil prices and the rising dominance of low-cost carriers like IndiGo in a price sensitive market.
Last week Jet’s board approved a rescue deal which will make its lenders, lead by State Bank of India (SBI), its largest shareholders.
The deal, which is subject to regulatory approvals, includes an equity infusion, debt restructuring and the sale or sale and lease back of aircraft.
Gulf-based carrier Etihad, which owns a 24 per cent stake in Jet Airways, is still in discussions to raise its stake in Jet, but will not shoulder any management responsibility, reports quoting sources said.
Forced by rising cash shortage, Jet Airways rationalised its route network, cancelled hundreds of flights as part of its plan to save up to Rs2,000 crore in costs over two years
The airline had cancelled about 60 flights scheduled for 28 February alone. It has also informed customers and the regulator DGCA about the cancellations.
Naresh Goyal and Etihad Airways CEO Tony Douglas on Wednesday met top officials of State Bank of India to finalise the restructuring plan. Etihad owns 24 per cent stake in Jet Airways.
Jet Airways, which has over Rs8,000 crore in debt, is looking for urgent liquidity infusion to pay its pilots, engineers and make payments to its lessors.