Wednesday, March 13, 2019

Naresh Goyal to exit cockpit to keep Jet Airways flying; Etihad, NIIF to pump Rs 3,800 crore into airline

New Delhi: Etihad Airways and the National Investment and Infrastructure Fund (NIIF) will jointly pump approximately Rs 4,000 crore into cash-strapped Jet Airways in a last-ditch effort to keep the financially troubled carrier afloat. Jet founder-chairman Naresh Goyal and his wife Anita will step down from the airline board and all executive positions, says an Economic Times report.

The bailout plan will see a conversion of lenders loans to equity and Jet Airways’ 51 per cent share in Jet Privilege will be pledged with them to raise fund. The financial daily has learnt that Jet's new investor is expected to be NIIF.

Naresh Goyal may have to give up management control if the proposals are accepted, and it will provide Etihad and NIIF — which will inject Rs 1,900 crore each — a bigger role in the airline’s functioning. Of the total amount, the Abu-Dhabi-based airline will invest Rs 750 crore as interim funding. At present, Etihad has 24 per cent stake in Jet Airways.

It may be noted that Goyal has already injected Rs 250 crore into the company, and this along with an additional Rs 450 crore — towards liabilities of promoter groups — will be converted into equity shares. Goyal’s stake will drop to around 22 per cent while NIIF will get about 20 per cent in the troubled full service airline.

As per the report, the proposal laid emphasis on making Jet a board-run airline. People in the know told the daily that talks are on and the Jet founder-chairman is not giving in without a fight.
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