Jet Airways founder Naresh Goyal steps down amid crisis

Jet Airways founder Naresh Goyal steps down amid crisis

Naresh Goyal's resignation will likely pave the way for potential investors to save India's oldest private carrier.

As a result, the stake of promoter Goyal will come down to 25 percent from 50 percent, while Abu Dhabi's Etihad Airways, which had a 24 percent stake in the carrier, came down to 12 percent. "There will be expression of interest which will be given by April 9 and binding bid by April 30", SBI Chairman Rajnish Kumar told CNBC TV18. "There is no legal bar on anyone with a funding and revival plan in place".

Both Naresh Goyal's and Etihad, which owns a minority stake in the airline, have been halved following the move, passing on control of the airline to its lenders, according to media reports. "No body is barred from bidding or taking over the airline as per the rule", he said. They had asked Goyal to step down immediately and make way for new management.

Saddled with debt of more than $1 billion, Jet has been on the brink of collapse, and had to ground more than two-thirds of its fleet as it struggled pay lenders, suppliers, pilots and leasing companies. Due to the non-payment of dues, a majority of the airlines business were grounded and it eventually prompted the chairman to step down.

Meanwhile, there are also worries over 200 pilots of Jet may resign.

Experts also made it clear that the airline needs a swift capital infusion to stay afloat. "That is the best process", Srinivas said, in response to a query on whether Jet Airways qualified for bankruptcy proceedings.

The decision paves the way for lenders, led by the State Bank of India (SBI), to invoke some of Goyal's shareholding and rescue the airline on an immediate basis. Shares of Jet Airways had jumped over 15% on the National Stock Exchange after the news reports, and closed the day at Rs 261 per share.

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