Naresh Goyal steps down as Jet Airways Chairman, lenders to pump in Rs 1,500 cr

Jet Airways Chairman Naresh Goyal stepped down on Monday, paving way for lenders to bail out the financially troubled airline he set up 25 years ago.

The board meeting held here also decided on ways to procure interim funding, an official statement said.

"Two nominees of promoter--Naresh Goyal and Anita Goyal--besides one nominee of Etihad Airways will step down from the board," the statement said.

"An interim management committee at the instructions of lenders will manage and monitor daily operations and cash flow of the airline," said the statement.

The board said there will be immediate funding support of up to Rs 1,500 crore by lenders by way of issue of appropriate debt instrument against the security of the assets of Jet Airways.

According to the statement issued by Kuldeep Sharma, vice president--Global Compliance and Company Secretary, "the bidding process will be initiated by lenders for sale/issue of shares to new investor (s)," and the "process is expected to be completed in June quarter" of the current financial year.

The airline has over one billion dollars in debt and has to repay money to banks, lessors of planes and suppliers besides clearing pending salaries to its pilots.

Jet has been suffering bruising competition from low-cost airlines, fluctuating crude prices and a weak rupee.

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 adding there is also a possibility of bringing in another investor.

"We believe Jet Airways is a good aviation property and it is in every body's interest that it continues to fly," Kumar had said.