Jet Airways resolution plan: Founder Naresh Goyal agrees to step down as chairman as part of rescue deal

Jet Airways’ founder Naresh Goyal has agreed to step down as chairman of the airline’s board, a source with direct knowledge of the matter told Reuters on Thursday, as the cash-strapped Indian carrier inches closer to securing a rescue deal. Eithad, which owns a 24 percent stake in Jet Airways, is, however, reticent to provide interim funding of about 7 billion rupees ($99 million) to Jet Airways, the source said. Saddled with a billion dollars in debt, Jet Airways has defaulted on loans and has not paid pilots, leasing firms and suppliers for months. Lessors have grounded more than a dozen of its planes pending payment of dues. State Bank of India (SBI) had called an urgent meeting of lenders with Jet Airways Chairman Naresh Goyal and the domestic carrier’s significant shareholder Etihad Airways’ CEO Tony Douglas on Wednesday to discuss a way forward for the debt-laden airline. SBI is the lead lender of a consortium that has extended loans to Jet Airways. [caption id=“attachment_952053” align=“alignleft” width=“380”] File photo of Naresh Goyal, chairman, Jet Airways. Reuters[/caption] Earlier on Monday, Jet and Etihad said in a joint statement they along with key financial stakeholders are working towards finalisation of bank-led provisional resolution plan for the debt-laden domestic airline. The two carriers had expressed confidence that once the plan is implemented, Jet Airways would “re-emerge as a viable and robust airline to reclaim its rightful place as airline of first choice for its customers”. The joint statement has been issued by Goyal and Douglas. Officials had said Goyal was not agreeable to Etihad’s demands that he should pledge his shares in the airline as well as in the loyalty programme, Jet Privilege, with lenders to raise funds. Another bone of contention was that the Gulf carrier wanted Goyal to be the sole promoter of Jet Airways but without board representation and management control. Meanwhile, Shares of Jet Airways fell nearly one percent Thursday after the company said seven more aircraft have been grounded due to non-payment of lease rentals. The scrip closed at Rs 222.80, down 0.91 percent on BSE. During the day, it tanked 6.15 percent to Rs 211. At NSE, shares closed 0.35 percent lower at Rs 223.50. So far this month, as many as 13 planes of the company have been grounded on account of non-payment of rentals to lessors. In a filing to stock exchanges Wednesday, the full-service airline said “an additional seven aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements” With inputs from agencies