Cash-strapped Jet Airways to get Rs 1,500 crore funds as founder Naresh Goyal, wife step down

Jet Airways Founder and Chairman Naresh Goyal and his wife Anita Goyal on Monday resigned from the board of the crisis-hit airline. The decision was taken at the airline's board meeting in Mumbai. The development comes as a majority of the airline's fleet has been grounded amid non-payment of dues to banks, suppliers, pilots and lessors.

Jet Airways said Naresh Goyal, Anita Goyal and one nominee of Etihad Airways PJSC would step down from the board. Abu Dhabi-based Etihad is a strategic partner with 24 per cent stake in Jet Airways. Naresh Goyal would also cease to be the chairman, the filing said.

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Following Goyal's exit, the lenders will nominate two members to the Jet Airways' board. Meanwhile an interim management committee will be constituted top manage the airline's daily operations. 

According to reports, lenders had been pushing for Naresh Goyal's exit to infuse Rs 1,500 crore funds. Lenders wanted Naresh Goyal to give up his controlling stake and exit the board for fresh funding.  

The airline's notification to the exchanges said that the airline will get "immediate funding support of up to Rs 1,500 crore by lenders by way of issue of appropriate debt instrument against security of its assets."

The news of Goyal's exit led to a rally in Jet Airways' shares. The Jet Airways stock closed 13 per cent higher, outperforming the broader market which settled around 0.9 per cent lower amid global growth concerns. 

Saddened with Goyal's exit, Ajay Singh, Chairman and Managing Director, SpiceJet termed the development a "a sad day for Indian aviation". 

"Today is indeed a sad day for Indian aviation. By launching a truly world class airline, Naresh and Anita Goyal made India proud.
This is also a wake-up call for Indian policy makers. We urgently need to address structural challenges that make India’s airlines uncompetitive to airlines around the world," he said in a statement. 

Jet Airways, which has been operating for more than 25 years, is grappling with financial crunch and is also looking to raise fresh funds.
The airline has suspended operations on at least 14 international routes till end-April and over 80 planes are on the ground. As many as 54 aircraft have been grounded due to non-payment of lease rentals. 

Days ago, the pilots of the Jet Airways had written to Prime Minister Narendra Modi and Civil Aviation Minister Suresh Prabhu to intervene in the matter and direct the board over pending salaries. 

However, Jet Airways, which is facing the worst financial crisis of its 25-year existence with more than one billion dollars of debt, claimed that all employees except for pilots and engineers are getting paid on time.