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Naresh Goyal likely to step down from board, Jet Airways accepts Etihad bailout plan; both airlines to ink pact soon

FP Staff
Last month, Goyal and his wife Anita Goyal stepped down from the board of the airline, which has more than Rs 8,000 crore debt.

Jet Airways has reportedly agreed to most of the conditions set by its partner Etihad for offering a lifeline to the debt-laden domestic carrier, Business Standard reported on Friday, citing sources.

Both the airlines are set to sign a memorandum of understanding (MoU) within days, which would result into stepping down of Jet Airways founder chairman Naresh Goyal from the board of directors, Reuters reported.

Jet Airways shares were up over 12 percent to Rs 266 in early morning trade on BSE.

Jet Airways and Etihad were not immediately available for comment.

On January 17, Naresh Goyal had said that he was ready to invest up to Rs 700 crore in Jet Airways on the condition that his stake did not fall below 25 percent, said a PTI report.

Goyal's offer came against the backdrop of strategic partner Etihad reportedly putting forward strict conditions, including that Goyal should give up control, for infusing funds into the crisis-hit carrier.

In a letter to SBI chairman Rajnish Kumar, Goyal said he was writing with reference to the resolution plan under discussion and in view of Etihad's position, "despite the significant cash crunch and imminent grounding, which the airline is facing".

Naresh Goyal said he was committed to an "infusion of funds into the company to the extent of ‚¹ 700 crore" and pledging all his shares. This is subject to the condition that his shareholding post such infusion remained at least 25 percent, he said in the letter, which was seen by PTI.

"Should this not be possible, then I would not be able to infuse any funds or pledge my shares, unless Sebi accords me an exemption permitting me to increase my reduced stake (if it is to be below 25 percent) without triggering the Takeover Code," according to the letter.

Meanwhile, Jet Airways CEO Vinay Dube told its employees on Thursday that the situation of the crisis-ridden airline might get tougher and asked them to be patient.

In an email to the employees, Dube said, "It might get tougher before it gets better, and our ascendancy will be gradual, but collectively, with your unstinted support and commitment, we will come out of this a stronger airline."

On Wednesday, Jet Airways had decided to cancel 15 flights following grounding of six Boeing 737 planes due to non-payment of lease rentals.

Dube said that the company's chairman, board of directors and the management team are working hard on a balance sheet transaction that will help in eliminating its "current challenges".

"In fact, the airline's key stakeholders are actively engaged towards finalisation of the resolution plan. We are very close, and I ask for your continued patience. Given our ongoing challenges, this is a very tall ask," Dube wrote in his message.

Dube added "While flight cancellations, regardless of reasons, have an immense impact on guests, frontline colleagues as well as our operational and commercial teams across the network, I want to highlight to you that it has been your hard work and dedication that has put us on top of Indian aviation's reliability chart."

He added that despite some challenges faced by the airlines he was confident that it will once again be at the top of the class in terms of key operational parameters for the month of January.

€" With inputs from agencies



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Also See: Jet Airways shares fall for second straight session, plunge over 5% amid continued uncertainty over revival plan

Etihad, lenders hold discussion to facilitate emergency funding for debt-laden Jet Airways

Naresh Goyal ready to infuse up to Rs 700 cr in crisis-hit Jet Airways with a rider, wants his stake to remain above 25%

Read more on Business by Firstpost.