28 February 2019: Jet Airways founder Naresh Goyal has reportedly stepped down as the Chairman of the company’s board. The decision came as the debt-ridden Jet Airways is closing in on a rescue deal with Etihad Airways, news agency Reuters reported quoting sources.
Speculations were rife that founder Naresh Goyal would exit Jet Airways due to differences with the lenders and a resolution plan which prescribed the same in order to save the embattled airline.
Jet Airways has not confirmed Goyal’s resignation yet.
Presently, Jet Airways is looking to restructure its debt as well as raise funds in the face of mounting unpaid dues. Earlier in February, the company had informed the exchange that its board had approved a plan by its consortium of lenders, led by State Bank of India. The draft resolution plan primarily comprises of infusion of funds, restructuring of debts and monetisation of assets.
The Bank Led Resolution Plan (BLRP) by lenders estimated a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale and lease back of aircraft, among other things.
Shareholders of Jet Airways had approved conversion of loan into shares and other proposals during the extraordinary general meeting (EGM) last week.
As on September 30, 2018, Jet Airways had gross debt of Rs 8,411 crore (including terms loans from banks and dues to lessors for aircraft lease), as against Rs 8,403 crore as on March 31, 2018. The company has large repayments of Rs 1,700 crore due over December 2018 to March 2019, Rs 2,444.5 crore in FY2020 and Rs 2,167.9 crore in FY2021.
Jet defaulted in servicing its loan obligations on December 31 2018 and the 90-day window before its loans are dubbed non-performing assets (NPA) ends on 31 March 2019. The company is reeling under losses for the last four consecutive quarters with its shares losing over 60% in one year.
Meanwhile, the Jet Airways domestic pilots’ body, National Aviators Guild (NAG), has decided to defer its proposed agitation in light of the rising tension between India and Pakistan. Over 1,100 pilots of the airline unionised and represented by the NAG had planned to go on a black band protest and flight safety period from March 1. Pilots ready to cooperate for now has given Jet Airways some breathing space for now.