Jet Soars on Report Goyal may Step Down
Mumbai: Jet Airways’ stock soared over 16% on Monday after a media report said a resolution plan for the airline’s bailout will be finalised this week and that founder chairman Naresh Goyal will cede controlling stake and step down from the board.
The stock closed at ₹ 294.40, beating the Sensex which fell a tad. This was the biggest gain for Jet’s stock since November 15, when it rose 24%.
A consortium of lenders led by State Bank of India, the country’s largest bank by deposits, has been meeting frequently to stitch together a resolution plan for Jet.
India’s second biggest airline has defaulted on loans for December, and delayed employee salaries and aircraft lease rentals.
Jet has been trying to convince Etihad Airways, which owns 24% in Jet, to increase its stake. Abu Dhabi-based Etihad’s key condition has been that Goyal should give up ownership and decision making powers, as ET had reported earlier.
According to a media report on Monday, Goyal has changed his
long-enduring stance of retaining control in the airline, ceding to Etihad’s demand. The report said his stake may decline to 20-25% (ET had reported Etihad’s demand of 22%) from 51% currently. Etihad may increase its stake significantly from 24% and banks may raise equity as part of restructuring. It also said Goyal’s son Nivaan Goyal may replace him on the board. ET on Monday had reported that Etihad has also put forward additional clauses including that it won’t pledge its shares to Jet’s lenders for loans and that banks have to lend double the amount that Etihad puts in as equity.