Naresh Goyal steps down; Jet Airways board approves conversion of lenders’ debt into equity

March 26, 2019: Finding a sustainable solution to the turnaround of Jet Airways has been receiving the attention of all stakeholders to enable the airline to restore normalcy to its level of operations.

As part of the proposed solution, the Board of Directors of Jet Airways recently met and approved the conversion of Re 1 of lenders' debt into equity by the issuance of 11.4 crore equity shares, in accordance with the RBI circular of 12th February, 2018. With this, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways.

The board also approved the reconstitution of the board of directors of the company as promoter Naresh Goyal, Anita Goyal and nominee director of Etihad Airways Kevin Knight tendered their resignation. The two nominees of the promoter and one nominee of Etihad Airways will continue on the board. Two lender nominees will be inducted to its board, subject to the receipt of requisite approvals.

As part of the resolution plan, the lenders will provide an immediate interim funding support of Rs 1500 crore to Jet Airways. The company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner. The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline's long term transformation to continue expansion and to regain its position as a global player.

An Interim Management Committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the board of directors with the support of McKinsey & Co.

The airline in a press release said that its long-term operating plan focuses on revenue enhancement and cost optimisation as the fundamental pillars of building a healthy, growing and durable airline. The plan addresses a cross-section of areas in addition to an operating plan, which takes advantage of the airline's fleet, its resources, slots and its network.

As part of the resolution plan, the lenders will also begin the process of sale / issue of shares to new investors which is expected to be completed in the June quarter.

Meanwhile, Naresh Goyal said, "For me, the 22,000 employees are my own family, as dear to me as Nivaan, Namrata and my wife Neeta, and no sacrifice is too big for me to safeguard the interest of Jet Airways and the families of the 22,000 employees. For the sake of my family of 22,000 employees and their respective families I have today taken the step of stepping down from the Board of Jet Airways. I became the Chairman on 1st April, 1992 and my family is behind me and with me in this decision and I hope you will support my decision too. I will miss you one and all. Thank you for your brilliant dedication and loyalty down the years. I am proud of you and wish you all a great future ahead with our Jet Airways!"