Jet Airways founder Naresh Goyal to quit as chairman today

Jet Airways founder Naresh Goyal to quit as chairman today

Jet Airways founder Naresh Goyal to quit as chairman today

"That is the best process", Srinivas said, in response to a query on whether Jet Airways qualified for bankruptcy proceedings. It will re-deploy several of its grounded aircraft and renew numerous routes it had temporarily suspended.

Naresh Goyal has quit as the chairman of Jet Airways (India) Ltd, stepping down from the board of the airline he founded two-and-a-half decades ago, as part of a plan that involves lenders taking control of the carrier.

Saving Jet is crucial for Indian Prime Minister Narendra Modi as he looks to avoid thousands of job losses ahead of a general election. The rescue deal that was proposed by the banks required that Goyal's stake be brought down.

According to the airline, as part of the resolution plan, the lenders will also begin the process of sale/ issue of shares to new investors which is expected to be completed in the June quarter.

The report said that if the government's plan for Jet succeeds, then state-run banks including State Bank of India and Punjab National Bank as well as NIIF would together own at least a third of the airline until they find a new buyer.

Saddled with more than $1 billion of debt, Jet is struggling to stay afloat.

The decision paves the way for lenders, led by the State Bank of India (SBI), to invoke some of Goyal's shareholding and rescue the airline on an immediate basis.

Meanwhile, Etihad may remain on Jet's board for now, but its 24 per cent equity stake in the airline is expected to be diluted over the course of time.

Even as news of Goyal's departure led to a rally in Jet's shares, which ended the day 12.4 percent higher, analysts say there is still a long road ahead.

The banks will also give the airline a fresh loan of Rs 1,500 crore to meet payments and restore normal operations and the lenders will form an interim management committee to manage the airline, Jet said. It also needs to pay months' worth of salaries to pilots and other senior employees. One nominee of Etihad will step down from the board.

"We urgently need to address structural challenges that make India's airlines uncompetitive to airlines around the world", he added.

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