Jet Airways, which has been in the eye of a downward spiral for months now, almost grounding the whole airline over the past three months, has finally something to cheer for. The airline has managed to get into a holding pattern for the moment, or at least so I hope. Jet Airways has just concluded a board meeting today, where their chairman Naresh Goyal has finally stepped down from his position and will cede control of the airline to an interim management committee. Here is more about how Jet Airways Naresh Goyal Quits will impact the airline.
Jet Airways’ Naresh Goyal & Anita Goyal, both members of the Board of Directors, stepped down from the board with effect from today, on the insistence of the lenders to the airline, who will now run the show while they will get a new investor in the airline. Even Etihad’s nominee director Kevin Knight resigned from the board as well.
The Jet Airways board has also approved the issuance of 11.4 crore equity shares of the company to the lenders, who will now hold a majority stake in the airline. As per SBI, the biggest bank of India, and also the lead lender to the airline, after they pick up the equity stake in the airline, Naresh Goyal and his family will be left with 25% of the airline and Etihad Airways stake will go to 12% of the airline.
After this new management committee takes over the airline and will monitor daily liquidity status as well, Jet Airways’ stake will be put on the block for a new investor to buy out the stake of the banks in the airline. As per various sources, the banks will be able to sell their equity in the airline in the open markets to get the best price. The timeline of this share sale is in the next quarter. The banks say that everyone, including Etihad and Naresh Goyal, can participate in the stake sale.
But the best part of today is that there is an emergency funding of INR 1,500 crores coming to the airline. This would come by the way of issue of appropriate debt instrument against the security of its assets which will restore normalcy to the company’s level of operations. This would mean the employees get their unpaid salaries as well.
What lies ahead for Jet Airways is to pay back their lessors, and also get those planes back in the air at the earliest. I’ll be writing more about this when I get more clarity, but for the moment, I just wanted to let you know that the airline should start finding its feet again soon.