Jet Airways (India) Ltd chairman Naresh Goyal and his wife Anita have decided to step down from the carrier's board of directors. Mr Goyal, the founder of Jet Airways have also agreed to reduce his 51% stake to 25.5%. Lenders, including State Bank of India (SBI) and Punjab National Bank (PNB) have agreed to provide Rs1,500 crore as funding for restoring normalcy of Jet’s operations.
In a regulatory filing, Jet Airways says, "Two nominees of promoter, Mr Goyal and Ms Anita Goyal and Kevin Knight, the nominee of Etihad Airways PJSC to step down from the board. Additionally Mr Goyal to also cease to be the chairman of the company."
Jet Airways will issue 11.4 crore shares of Re1 each to the consortium of lenders led by SBI to convert the carrier’s outstanding debt.
“Immediate funding support of up to Rs1,500 crore by lenders by way of issue of appropriate debt instrument against security of its assets, which will restore normalcy to Company's level of operations,” the carrier said.
In its board meeting, Jet Airways also agreed to induct two nominee directors representing the lenders.
The debt-ridden carrier have also decided to set up an interim management committee to manage and monitor its daily operations and cash flow.
Last week, after meeting with government officials, SBI chairman Rajnish Kumar had told reporters that putting Jet Airways into bankruptcy was 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,” the SBI chairman had told reporters after a meeting with government officials, adding that placing Jet Airways into bankruptcy would mean grounding the airline.
According to estimates, Jet Airway's total debt stood at Rs8,000 crore. The company urgently needed funding to maintain whatever was left of its market shares, even as the airline pilots and crew were said to be approaching other airlines for employment.
The airline's pilots along with engineers and other highly critical segment of employees have not been paid salaries from 1 January 2019 and only 12.5% of December pay was given.
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.