Twenty-five years after founding private airline Jet Airways, Naresh Goyal and his wife Anita Goyal have stepped down from the board of the company. Once that is done, the banks are expected to offload their stakes. His government urged state-run banks to rescue the airline without pushing it into bankruptcy, sources have told Reuters.
For the airline, immediate funding is critical as lessors have grounded a third of its fleet crippling operations.
The lenders, led by the State Bank of India (SBI), would become majority shareholders in the airline. The carrier also announced the induction of two nominee directors of lenders.
Bidding process to be initiated by lenders for sale to new investor (s), the process expected to be completed in June quarter as per the resolution plan. They also pushed for Goyal to step down and his exit means he is no longer the chairman of the airline he had found in 1993 soon after India's drastic economic reforms, popularly known as liberalisation, were launched.
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The airline is also on the verge of losing hundreds of pilots who are on the lookout for new opportunities after Jet failed to pay their salaries since December.
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.
But competition from low-priced carriers, such as IndiGo and SpiceJet Ltd, together with high oil prices, hefty fuel taxes and a weak rupee piled on the pressure in recent months.
In a recent letter sent to Prime Minister Narendra Modi, the National Aviators Guild (NAG) had raised concerns after the pilots' group of Jet Airways revealed that the airline is onthe "verge of collapse".
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"Today is indeed a sad day for Indian aviation".
Jet said its board has also approved the constitution of an interim management committee at the request of the lenders to manage and monitor the daily operations and cash flow of the company.
"We urgently need to address structural challenges that make India's airlines uncompetitive to airlines around the world", he added.
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