Jet Airways lenders say bailout cannot be only bank-driven, ask Naresh Goyal and Etihad to play equal role in resolution plan

Shares of Jet Airways Ltd jumped as much as 6 percent on Friday, a day after two sources told Reuters that founder Naresh Goyal had agreed to step down as chairman.

FP Staff March 01, 2019 12:25:05 IST
Jet Airways lenders say bailout cannot be only bank-driven, ask Naresh Goyal and Etihad to play equal role in resolution plan
  • Goyal, who founded the full-service carrier 25 years ago, has also agreed to reduce his 51 percent stake in the airline

  • Gulf-based Etihad Airways holds 24 percent stake in the Mumbai-based full-service airline

  • SBI is the lead lender of a consortium that has extended loans to Jet Airways, which has been grappling with financial woes

Lenders of Jet Airways have reportedly asked airline's founder and chairman Naresh Goyal and partner Etihad Airways to contribute to the bailout, a media report said.

The State Bank of India (SBI) led consortium said there cannot be only a bank-driven bailout and both Jet and Etihad will have to a play an equal role in the resolution process, Business Standard reported.

Shares of Jet Airways Ltd jumped as much as 6 percent on Friday, a day after two sources told Reuters that founder Naresh Goyal had agreed to step down as chairman.

Goyal, who founded the full-service carrier 25 years ago, has also agreed to reduce his 51 percent stake in the airline but would continue to be a part of the company in some capacity even after stepping down as chairman, one of the sources said.

Jet Airways lenders say bailout cannot be only bankdriven ask Naresh Goyal and Etihad to play equal role in resolution plan

Representational image. Reuters

The move came a day after an urgent meeting of lenders with Goyal and Etihad Airways Chief Executive Officer Tony Douglas to resolve various issues between the two promoters as well as lenders and Etihad.

The Gulf-based carrier holds 24 percent stake in the Mumbai-based full-service airline.

SBI is the lead lender of a consortium that has extended loans to Jet Airways, which has been grappling with financial woes and is looking to rejig debt as well as raise funds.

On 14 February, Jet Airways' board had approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline.

Its shareholders have also approved the conversion of loan into shares and other proposals during the extraordinary general meeting on 21 February.

On Thursday, loss-making Jet Airways said six more aircraft had been grounded due to non-payment of lease rentals.

With this, the total number of aircraft taken out of operations due to a severe liquidity crunch in the airline and its subsequent failure to pay rentals to various lessors now
stand at 19 so far, as per the airline.

The carrier also said it is making all efforts to minimise disruption to its network due to the grounding of these planes and is "proactively" informing and re-accommodating its affected guests, it said.

--With PTI inputs 

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