Finding a sustainable solution to the turnaround of Jet Airways has been receiving the attention of all stakeholders to enable the airline to restore normalcy to its level of operations, said Jet Airways in a statement on Monday evening.
As part of the proposed solution, the Board of Directors of Jet Airways, which met on Monday, approved "the conversion of rupee one of lenders' debt into equity by the issuance of 11.4 crore equity shares, in accordance with the RBI Circular of 12th February 2018."
"As part of the resolution plan, the lenders will provide immediate interim funding support of Rs 1,500 crore to Jet Airways. The company will also engage with payment intermediaries for the release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner," said the statement.
"The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline's long term transformation to continue expansion and to regain its position as a global player," it further read.
Jet Airways further said, "An Interim Management Committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey and Co."
"The airline's robust and long-term operating plan focuses on revenue enhancement and cost optimisation as the fundamental pillars of building a healthy, growing and durable airline. The plan addresses a cross-section of areas in addition to an operating plan, which takes advantage of the airline's fleet, its resources, slots, and its network," the statement said.
Naresh Goyal, who stepped down as Jet Airways Chairman on Monday, said: "For me, the 22,000 employees are my own family, as dear to me as Nivaan, Namrata and my wife Neeta, and no sacrifice is too big for me to safeguard the interest of Jet Airways and the families of the 22,000 employees."
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"For the sake of my family of 22,000 employees and their respective families I have today taken the step of stepping down from the Board of Jet Airways. I became the Chairman on 1st April, 1992 and my family is behind me and with me in this decision and I hope you will support my decision too. I will miss you one and all," he said.
"Two nominees of promoter--Naresh Goyal and Anita Goyal--besides one nominee of Etihad Airways will step down from the board," the statement said.
"An interim management committee at the instructions of lenders will manage and monitor daily operations and cash flow of the airline," said the statement.
According to the statement issued by Kuldeep Sharma, vice president--Global Compliance and Company Secretary, "the bidding process will be initiated by lenders for sale/issue of shares to the new investor (s)," and the "process is expected to be completed in June quarter" of the current financial year.
The airline has over one billion dollars in debt and has to repay money to banks, lessors of planes and suppliers besides clearing pending salaries to its pilots.Jet has been suffering bruising competition from low-cost airlines, fluctuating crude prices and a weak rupee.
On March 20 this year, SBI Chairman Rajnish Kumar had said that the resolution plan is almost ready and it will not involve a bailout for any individual.
At the same time, talks with Abu Dhabi-based airline Etihad to secure a rescue deal are still on, he said adding there is also a possibility of bringing in another investor.
"We believe Jet Airways is a good aviation property and it is in every body's interest that it continues to fly," Kumar had said.
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