Jet Airways: SBI Asks Goyals, Their Nominees To Step Down from the Board

Moneylife Digital Team 20 March 2019

Economy & Nation

State Bank of India (SBI), the country's largest lender, has reportedly asked Jet Airways' chief Naresh Goyal and his wife Anita to step down from the carrier's board of directors.

Quoting sources, a report from ET Now says, the lender has asked the Goyals and their nominees, including Nasim Zaidi, non-independent director, and Gaurang Shetty, executive director of Jet Airways, to step down from the board.

#ETNOWExclusive | Sources on @JetAirways to @NayantaraRai: SBI asks Naresh Goyal and his wife Anita Goyal to step down from the board pic.twitter.com/spPxudY7qQ
— ET NOW (@ETNOWlive) March 20, 2019

According to a report from Reuters, after meeting with government officials, SBI chairman Rajnish Kumar told reporters that putting Jet Airways into bankruptcy is the 'last option' and that its lenders are making every effort to keep the airline flying.

“We believe that it is in everybody’s interest that Jet Airways continues to fly,” SBI chairman Rajnish Kumar told reporters after a meeting with government officials, adding that placing Jet into bankruptcy would mean grounding the airline.

At an extraordinary general meeting (EGM) in February 2019, shareholders of Jet Airways had approved, by an overwhelming majority, a proposal to convert a part of the company's loans into shares.

This was a significant development as the approval was required to go ahead with the bank-led provisional resolution plan (BLPRP) led by the consortium of the lenders. As part of the plan, public sector lenders would become the largest equity owners of the airline, virtually making it a nationalised carrier.

Etihad, however, abstained from voting on various proposals during the EGM.

"The BLPRP currently estimates a funding gap of Rs8,500 crore, including proposed repayment of aircraft debt of Rs1,700 crore, to be met by appropriate mix of equity infusion, debt restructuring, sale or sale and leaseback or refinancing of aircraft, among other things," Jet Airways had said in a regulatory filing.

Both SBI and Punjab National Bank (PNB) were said to have agreed to provide Jet Airways with Rs500 crore interim funding to continue operations until a long-term restructuring plan is worked out for its Rs8,000-crore debt.

Earlier, Jet Airways chairman Mr Goyal had asked Etihad, which has 24% stake in the airline, to bring in Rs750 crore demanded by lenders as promoter contribution. Etihad, however, expressed that it was willing to sell its 24% stake if it got a price of Rs150, which is much lower than the current price of Rs236. Lenders are willing to provide support but unwilling to hold more than 49% equity through debt conversion.

Comments

User

BV SUDHANVA

7 years ago

malik ne kutte ko chod diya?

Deepak Narain

7 years ago

Jet is a popular privately owned Indian airline. It needs to be kept alive and flourishing through instant support and later restructuring. Its overall performance is perhaps better than the nationalized Air India.

K G NAGAR

7 years ago

Govt. should suppersed the board and constitute new board as prviously done in case if Stayam& ILFS case.

Veeresh Malik

7 years ago

Who really owns the shares of Jet Airways that Naresh Goyal claims to own or control, especially after the whole TailWinds episode, and where did all the money go?