JET AIRWAYS chairman Naresh Goyal will step down from the board and reduce his stake in the cash-strapped Indian carrier, the company said today (25) as it closes in on a rescue deal led by state-run banks.
The banks, led by State Bank of India (SBI), will convert their debt into equity and take a controlling stake in the airline for a token sum of Rs 1, Jet said in a statement to the stock exchanges after its board met earlier today (25).
The banks will also give the airline a fresh loan of £164 million ($217.71m) to meet payments and restore normal operations and the lenders will form an interim management committee to manage the airline, Jet said.
Saddled with debt of more than £755.65m ($1 billion), Jet owes money to banks, suppliers, pilots and lessors – several of whom have started terminating leases with the carrier.
In its statement, Jet said the banks will initiate a bidding process to sell their stake in the airline to a new investor and that the process is expected to be complete by end-June.
Reports of Goyal’s departure led to a rally in Jet’s shares, which ended the day 12.4 per cent higher.