Lenders agree to infuse Rs 1,500 crore after Naresh Goyal steps down from Jet Airways board

The founder of Jet Airways Naresh Goyal and his wife Anita Goyal quit from the cash strapped airlines board. Which means, Naresh Goyal will also cease to be the chairman of the airline.  Jet Airways communicated after its board held a meeting today. Naresh Goyal owns a 51% stake in Jet Airways.

Jet Airways board also said that an interim management committee will be set up to manage and monitor the daily operations and cash flow of the company.

Apart from Goyal’s exit one member of Etihad Airways, which owns 24% stake in the airline will also step down from the board.

Lenders to the airline have announced funding of INR₹1,500 crore by way of issue of debt instrument against security of its assets to restore normalcy of operations.

In addition, the bidding process for issue of shares to new investors is expected to be completed in the June quarter.

The airline with a debt of more than US$ 1 billion is struggling to stay afloat. It has delayed payments to banks, suppliers, employees and lessors. Lessors have subsequently taken back Jet’s aircraft, forcing Jet Airways to scale down operations drastically.

In Jet’s total fleet of 119 aircrafts, 54 are grounded due to non-payments of dues to lessors and 24 were not flying due to lack of maintenance. This means, 2/3rd of Jet Airways fleet is non-functional at present.

The pilots of Jet Airways have also threatened to go on a strike from the 1st of April unless the airline signs a letter of intent to pay their salary dues.

After the announcement the shares of Jet Airways surged nearly 13% to INR₹ 254 today.

Jet’s last financial crisis occurred in 2013,  when the airline got  Abu Dhabi’s Etihad Airways to inject US$ 600 million capital for a 24 percent stake in the airline. The infusion helped Jet bring down debt and fight domestic competition.