Naresh Goyal resigns from Jet Airways following emergency board meeting

Saddled with debt of more than $1 billion, Jet owes money to banks, suppliers, pilots and lessors - several of whom have started terminating leases with the carrier.

The SBI-led consortium of lenders is working on a resolution plan for the cash-strapped Jet Airways for the last five months.

Naresh Goyal will also cease to be the chairman of the airline.

The lenders will nominate two directors to the Jet board and will shortly initiate an auction process to find a new strategic investor for the company.

Naresh Goyal is the Founder and Chairman of Jet Airways, a full-service airline that has been flying for more than 25 years.

The last time Jet was suffering with ballooning debt, Etihad Airways infused $600 into the airline and pick up a 24% stake, three London Heathrow slots and a major share in Jet's frequent flyer programme. Shares of Jet Airways had jumped over 15% on the National Stock Exchange after the news reports, and closed the day at Rs 261 per share.

Also, the banks have converted only 1 rupee ($0.0145) of their debt into equity.


Goyal and his wife Anita will step down from the board of the ailing airline following reduction in their stake to 25 percent as per the resolution plan formulated by SBI-led domestic lenders.

It also needs to pay months' worth of salaries to pilots and other senior employees.

Jet has survived collapse once before when it also got close to running out of cash in 2013.

But competition from low-priced carriers, such as IndiGo and SpiceJet Ltd, together with high oil prices, hefty fuel taxes and a weak rupee piled on the pressure in recent months. "That is the best process", Srinivas said, in response to a query on whether Jet Airways qualified for bankruptcy proceedings.

"Today is indeed a sad day for Indian aviation", said Ajay Singh, chairman and managing director at rival SpiceJet, adding that Goyal and Anita made India proud by launching a "world class" airline.

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.


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