Naresh Goyal to infuse around Rs 250 crore into debt-ridden Jet Airways

Naresh Goyal owns 51 per cent in the airline and is currently in Abu Dhabi to finalise a resolution plan

Jet Airways Chairman Naresh Goyal is putting in around Rs 250 crore in the airline as he negotiates a resolution plan with partner Etihad Airways.

The airline’s finances have been stretched for the last few months and it has been making part payment to a section of employees and its vendors. Fresh funds would help the airline clear its outstanding dues.

The airline had promised to pay 75 per cent of November salary to pilots and engineers by January-end, but has paid only 50 per cent to date. National Aviator’s Guild and the pilots union will be meeting on Monday to discuss the further course of action. Lessors, too, have been threatening action over unpaid dues.

Goyal owns 51 per cent in the airline and is currently in Abu Dhabi to finalise a resolution plan. The interim funding of Rs 250 crore would be critical before the airline restructures its debt and gets fresh capital infusion from Etihad and lenders. 

Etihad, too, has committed to support the release of $35-million from Jet’s loyalty programme to the airline, but that is subject to conditions.Jet Airways did not respond to an email query on the topic.

Last Thursday, the airline’s Chief Executive Officer Vinay Dube informed employees the airline was very close to finalising a resolution plan and urged them to remain patient. Sources earlier said Goyal had accepted most of Etihad’s conditions and the two sides are expected to sign a memorandum of understanding within days. Under the plan, Goyal’s stake would reduce from 51 per cent to around 22 per cent, while partner Etihad’s stake would rise from the existing 24 per cent to 40 per cent. 

Banks are likely to hold 30 per cent stake after conversion of loans into equity and fresh infusion, with State Bank of India taking up 15 per cent. Goyal will step down from the board and his son Nivaan is expected to join the board.

The board of directors will meet on February 14 and an extraordinary general meeting will be held on February 21 to secure shareholders’ nod for increase in authorised capital, conversion of debt into equity, and appointment of lenders’ nominee directors to the board.

Turbulent flightpath

• Jet Airways defaulted on loan principal and interest payments for December-end quarter. Airline has defaulted on lease rents; paid only 50% of salaries to senior management and pilots

• Lenders to restructure airline’s debt under the Sashakt plan for resolution of stressed assets outside insolvency courts

• Etihad has committed to support release of $35 million from Jet’s loyalty programme to the airline, with caveats