A consortium of banks led by the State Bank of India (SBI) pledged to inject up to INR15 billion rupees (USD218 million) in immediate support for the ailing Jet Airways (JAI, Mumbai International) after its Chairman and founder Naresh Goyal had stepped down.
The carrier said in a stock market filing that the fresh loan "will restore normalcy to the company's level of operations."
Goyal pledged his entire 51% stake to creditors. The banks are expected to convert their debt into equity at INR1 rupee (USD0.01) per share.
As a part of the restructuring, Goyal, his wife Anita Goyal, and Kevin Knight, the representative of Etihad Airways will step down from the board. Naresh Goyal will also leave the post of the Chairman. In their stead, the lenders will form an interim management team.
The banks are hoping to attract a new investor and treat their 51% stake as an interim solution.
"Bidding process [will] be initiated by Lenders for sale/issue of shares to new investor(s), the process [is] expected to be completed in [the second quarter of 2019]," the carrier said.
Etihad Airways is also willing to dispose of its 24% stake and is due to make a decision at its next board meeting on March 31.
Goyal's resistance to relinquishing his influence and positions at Jet Airways used to be the biggest obstacle towards any resolution of the crisis at the airline.
Jet Airways currently operates less than a half of 105 aircraft, with at least forty-seven units grounded by lessors for non-payment of lease rates. The carrier also slashed its network, including both domestic and international routes, and operates around a quarter of departures in comparison to its full schedule.
An earlier version of the rescue plan assumed that Jet Airways needs an immediate injection of INR85 billion rupees (USD1.2 billion).
