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Jet Airways to get Rs 1,500 cr 'immediate support' as founder Naresh Goyal quits

Deepika S

Mumbai, Mar 25: Jet Airways said on Monday that chairman Naresh Goyal and his wife Anita Goyal resigned from its board of directors. The cash-strapped airline also said lenders of the carrier, including State Bank of India (SBI) and Punjab National Bank (PNB) have agreed to provide Rs1500 crore as funding for restoring normalcy of Jet's operations

Chief Executive Vinay Dube is expected to stay on board the 25-year-old airline Goyal set up with his wife in 1993.

Naresh Goyal will cease to be the chairman of the company, Jet Airways said. The carrier also announced the induction of two nominee directors of lenders.

The financially-struggling airline also announced the constitution of an Interim Management Committee "at the instructions of the lenders to manage and monitor the daily operations and cashflow of the company".

"Immediate Funding support of up to Rs 1,500 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," it said.

Also Read | Jet Airways pilots write to PM about salary dues, say their stress 'can easily compromise safety'

Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March.

Jet Airways share price has been gaining for the last two days and has risen 6.93% during the period. Jet Airways share price touched an intraday low of Rs 220.25, down 2.48% on BSE. The share price has fallen 62.42% over last one year lost 16% since beginning of this year.

Founder and chairman Naresh Goyal owns a 51% stake in Jet Airways, along with his wife, Anita, who is also on the airline's board.

Jet Airways, which is facing a severe cash crunch, defaulted on a domestic loan repayment in December. According to Reserve Bank of India (RBI) regulations, lenders must resolve cases pertaining to defaulting companies such as Jet Airways within 180 days of their first default.

The airline has not paid salaries to a section of its employees, including pilots. It has also not cleared dues to lessors for the past few months.

Last week, Jet Airways' pilots threatened to stop flying from April 1 if the cash-strapped airline did not come up with a rescue plan in place by March 31, a trade union body said.

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