Naresh Goyal resigns from Jet Airways following emergency board meeting

Naresh Goyal, chairman of India'in Hong Kong April 14, 2008. REUTERS/Victor Fraile/Files
  • State Bank of India has reportedly agreed to infuse ₹15 billion into the private carrier.
  • Lenders to form an interim management committee to manage and monitor the daily operations and cash flows.
  • Lenders to undertake a bidding process for its shares.
Jet Airways founder and chairman Naresh Goyal on Monday stepped down from the board of the struggling airline.

The move comes following an ‘emergency board meeting’ on Monday. Its main lender State Bank of India reportedly agreed to infuse ₹15 billion into the private carrier to help it stay afloat. Goyal’s wife Anita Goyal and Kevin Knight, a nominee of Etihad Airways, have also resigned.

Stakes of both Naresh Goyal and Etihad, which owns a minority stake in the airline, have been halved following the move, passing on control of the airline to its lenders, according to media reports. Jet's shares rose almost 13% following the news of Goyal's exit.

According to a regulatory filing by Jet, an interim management committee will be formed by its lenders led by the State Bank of India that will manage and monitor the daily operations and cash flow of the airline.

Additionally, the lenders will begin a bidding process to sell shares to new investors by the end of the June quarter.

Jet Airways, which is saddled with over $1 billion in debt, has grounded nearly 40 planes because of non-payment of dues in the past few weeks. Many of its pilots and other support staff have also not been paid salaries for several months, according to media reports.

Earlier this year, the airline struck a debt resolution plan with its lenders. However, there were disagreements between the Jet's management and Etihad Airways, as well as among creditors, prompting the Indian government to hold an emergency meeting recently to urge its state-run lenders to bail out the airline.

With IANS





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