Naresh Goyal, wife resign from Jet Airways; lenders to take charge

An Interim Management Committee to monitor the daily operations and cash flow of the Company

Naresh Goyal, Chairman of Jet Airways | File photo

Jet Airways on March 25 got a new lease of life with the Bank Led Interim Resolution Plan (BLIRP) for the revival of the airline coming into effect. The board of Jet Airways at a hurriedly convened board meeting approved the issue of ₹11.4 crore equity shares of the Company to the Lenders upon conversion of ₹1 of the outstanding debt.

As a pre-condition to this, Jet Airways founder and chairman Naresh Goyal and his wife Anita Goyal resigned from the board. Another director Kevin Knight has also resigned. The board has accepted their resignations.

With this Naresh Goyal’s 25 years at the helm of Jet Airways comes to an end. Additionally, he will also cease to be the Chairman of the Company.

The board has also passed a resolution for induction of two nominee directors of lenders on the board. The board also in accordance of the resolution plan has approved the creation of appropriate security over the Company's assets for securing the existing facilities extended by the Lenders and the proposed immediate funding support of up to ₹1,500 crore by way of issue of appropriate debt instrument.

 

It has also been decided for constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the Company. More details are awaited.

Jet Airways shares rose on the news of the resignation of the Goyal couple and closed at ₹254.50, up 12.69% on the BSE.

First phase of revival

Monday’s development heralds the beginning of Jet’s first phase of revival. The immediate infusion of ₹1500 crore through fresh borrowing would address the short term worries of staff salary and leased planes which were grounded.

The resignation of Kevin Knight, Etihad’s nominee indicates that the Abu Dhabi based airline may not stay invested in the company. A final decision on this will be taken on 31st March by Etihad board.

“We see this as positive for the company as urgency of funds and new investors wanting removal of old promoters are address. Which should lead to some extent of revival of operations. There would be potential investors which would show interest in the company as the routes and slots are having highest priority among corporate travellers,” said Sameer Kalra , an equity research analyst and founder of Target Investing .