Jet founder Goyal deplaned, signs off

NEW DELHI/MUMBAI, March 25

Jet Airways chairman Naresh Goyal has stepped down from the board of the Indian carrier he founded 25 years ago, the company said on Monday, as part of a rescue deal led by state-run banks to save the airline from bankruptcy.

Saddled with debt of more than $1 billion, Jet has been on the brink of collapse, and had to ground flights as it struggled to pay lenders, suppliers, pilots and leasing companies.

Banks have moved in to take control of the airline after Jet failed to convince investors, including largest shareholder Etihad Airways, to invest more money.

Goyal’s departure, however, is likely to lead to potential investors coming in to save India’s oldest private airline. Tata Sons, in November, had been in talks to invest in Jet but on the condition that Goyal would step down or take a less prominent role.

Under the rescue plan, Jet’s lenders, led by State Bank of India (SBI), will take a controlling stake of just over 50 per cent, the airline said in a stock exchange announcement.

The banks will issue a loan of Rs 1,500 crore to meet Jet’s obligations and form an interim management committee to oversee operations.

Goyal’s 51 per cent stake has been halved to make room for the banks, according to reports.

As part of the bailout plan, lenders will start a bidding process to sell their stake in the airline to a new investor.

Bids to buy a stake in Jet will open on April 9 and close on April 30 with the expectation that a new investor will be in place by May 31, SBI chairman Rajnish Kumar said. — Reuters