Goyal steps down, Jet bid door ajar

Both SpiceJet and Tata-owned Vistara are believed to be eyeing the prospect of bidding for Jet Airways

  • Published 26.03.19, 3:44 AM
  • Updated 26.03.19, 3:44 AM
  • 2 mins read
Jet Airways founder and chairman Naresh Goyal (PTI file picture)

Jet Airways founder and chairman Naresh Goyal and his wife Anita stepped down from the board of the troubled, debt-laden airline after a meeting of its directors here on Monday approved a revised resolution plan.

Goyal will cease to be chairman of the airline that he founded in 1993 as an air taxi operator before it turned into a full-fledged airline in 1995.

Under the terms of the revised resolution plan, Etihad Airways’ nominee director Kevin Knight will also step down from the board.

Goyal’s nominee directors — Gaurang Shetty and Nasim Zaidi — will, however, continue to represent his interests on the board for now. Shetty was a former acting CEO of the airline while Zaidi, a former civil servant, was a former director-general of civil aviation.

Goyal’s stake in the airline will be halved to 25.5 per cent from 51 per cent and Etihad’s holding of 26 per cent will also be pared to 12 per cent from the existing 24 per cent after the conversion of one rupee worth of debt in the airline into 11.4 crore equity shares which will be issued to the lenders’ consortium led by the State Bank of India.

The banks will effectively have a 51 per cent stake in the airline after the debt-to-equity conversion.

Etihad will retain one nominee on the board: Robin Kamark who oversees the Abu Dhabi-based airline’s minority equity investment strategy.

The lenders will nominate two directors to the airline’s board and provide immediate funding support of Rs 1,500 crore through the issue of debt instruments against the security of the airline’s assets.

An interim management committee will be formed to manage and monitor the daily operations and cash flow of the company, the airline said in a regulatory filing with the Bombay Stock Exchange.

The Jet Airways stock leapt 12.7 per cent to close at Rs 254.50 on the BSE after touching a high of Rs 266.

The banks will scout for a strategic investor for the airline through a bidding process which they expect to complete by the end of June this year.

But the lenders are not entirely slamming the door on Goyal who will be allowed to participate in the bidding.

SBI chairman Rajnish Kumar told a news channel the lenders will release a document by April 9 seeking an expression of interest from bidders. Binding bids will have to be submitted by April 30, he added.

“Nobody is barred from bidding for the airline. It could be a financial investor; it could be an airline including Naresh Goyal or Etihad,” he added.

Both SpiceJet and Tata-owned Vistara are believed to be eyeing the prospect of bidding for Jet Airways when the share auction opens.

Private equity players are also likely to be in the fray. 

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