Jet Airways Chairman Naresh Goyal on Monday stepped down from the Chairman post. This move is expected to pave way for lenders to bail out the cash-strapped airline.
According to an official statement, the board also decided on ways to procure interim funding. “An interim management committee at the instructions of lenders will manage and monitor daily operations and cash flow of the airline,” said the statement.
“Two nominees of promoter—Naresh Goyal and Anita Goyal—besides one nominee of Etihad Airways will step down from the board,” the statement said.
In the meeting, the board said there will be immediate funding support of up to Rs 1,500 crore by lenders. It will be by way of issue of appropriate debt instrument against the security of the assets of Jet Airways.
Meanwhile, Kuldeep Sharma, vice president—Global Compliance and Company Secretary, said, “the bidding process will be initiated by lenders for sale/issue of shares to the new investor (s),” and the “process is expected to be completed in June quarter” of the current financial year.
Jet has been suffering bruising competition from low-cost airlines, fluctuating crude prices and a weak rupee. Set up Goyal 25 years ago, the airline has over one billion dollars in debt currently. It also has to repay money to banks, lessors of planes and suppliers besides clearing pending salaries to its pilots.
On March 20 this year, SBI Chairman Rajnish Kumar had said that the resolution plan is almost ready and it will not involve a bailout for any individual.
At the same time, talks with Abu Dhabi-based airline Etihad to secure a rescue deal are still on, he said. Kumar added that there is also a possibility of bringing in another investor.