Etihad, NIIF To Pour ₹3,800 Crore In Jet Airways, Naresh Goyal To Step Down
Etihad Airways and the National Investment and Infrastructure Fund (NIIF) will together put- in ₹4,000 crore into debt- ridden Jet Airways in a last- ditch effort to keep the airlines afloat.
The company’s founder- chairman Naresh Goyal and his wife Anita will step down from the airline board and all executive positions.
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.
Naresh Goyal will immediately step down from the chairmanship of the loss-making carrier, and relinquish all executive roles. The 69-year-old tycoon would be designated as chairman emeritus (an honorary post) till 2025.
According to the draft proposal, Naresh Goyal will nominate two persons — other than himself and wife Anita — to the airline’s board. Nivaan Goyal, his son, will be considered for an executive position in the company, the publication mentioned.
On Monday, Jet defaulted on the part-repayment of its external commercial borrowings because of a fund crunch.