Breaking: Naresh Goyal resigns from Jet Airways & airline set to get funding

Jet Airways, which has been in the eye of a downward spiral for months now, almost grounding the whole airline over the past three months, has finally something to cheer for. The airline has managed to get into a holding pattern for the moment, or at least so I hope. Jet Airways has just concluded a board meeting today, where their chairman Naresh Goyal has finally stepped down from his position and will cede control of the airline to an interim management committee. Here is more about how Jet Airways Naresh Goyal Quits will impact the airline.

a large airplane in a hangar

Jet Airways’ Naresh Goyal & Anita Goyal, both members of the Board of Directors, stepped down from the board with effect from today, on the insistence of the lenders to the airline, who will now run the show while they will get a new investor in the airline. Even Etihad’s nominee director Kevin Knight resigned from the board as well.

The Jet Airways board has also approved the issuance of 11.4 crore equity shares of the company to the lenders, who will now hold a majority stake in the airline. As per SBI, the biggest bank of India, and also the lead lender to the airline, after they pick up the equity stake in the airline, Naresh Goyal and his family will be left with 25% of the airline and Etihad Airways stake will go to 12% of the airline.

After this new management committee takes over the airline and will monitor daily liquidity status as well,  Jet Airways’ stake will be put on the block for a new investor to buy out the stake of the banks in the airline. As per various sources, the banks will be able to sell their equity in the airline in the open markets to get the best price. The timeline of this share sale is in the next quarter. The banks say that everyone, including Etihad and Naresh Goyal, can participate in the stake sale.

But the best part of today is that there is an emergency funding of INR 1,500 crores coming to the airline. This would come by the way of issue of appropriate debt instrument against the security of its assets which will restore normalcy to the company’s level of operations. This would mean the employees get their unpaid salaries as well.

What lies ahead for Jet Airways is to pay back their lessors, and also get those planes back in the air at the earliest. I’ll be writing more about this when I get more clarity, but for the moment, I just wanted to let you know that the airline should start finding its feet again soon.

About Ajay

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe. Ajay is a frequent contributor and commentator on the media as well, including ET Now, BBC, CNBC TV18, NDTV, Conde Nast Traveller and many other outlets.

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  1. This is just a golden liner. One should understand the real reason for the losses. How the new management/ buyer is going to make profit to repay/ recoup the investments? Remember Jetinspite of being in business was making loss? Or it only notional/ on paper, another money siphoning? What happened to the Forensic audit that lenders were to carry out? No report on that – as usual the case in India. Meanwhile people are talking about turnaround! The banks exist because of public money. Hence the banks owe to the public to make full and transparent disclosure on its forensic audit findings on Jet finances. May be SC monitored probe is required. When SC can enter Cricket through nominating COAs they should do here and then extend to full Airline industry in India. Then SC will be doing a real justice.

  2. Now I want this government to bailout every private sector company that is in the red…

    Let’s see also how the banks manage the company for the near future and which investor(s) actually might be interested in investing…

  3. “best part of today is that there is an emergency funding of INR 1,500” – isn’t 1500 INR something like 20 bucks? If that’s the best part, could you please write about the worst part.

  4. He and she dragged the airline to the ground just cause he and she wanted to operate the airine as a mom and pop shop. Its a great airline just needs professional management without any interference from his wife who called the shots and considered the company her personal fiefdom despite it being a publicly listed company. If they wanted to run it like that they should have not listed it and kept it as a private limited company.

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