NEW DELHI: Jet Airways’ Chairman Naresh Goyal and his wife will step down from the airline’s board, Indian television news channels reported on Monday, as the cash-strapped Indian carrier closes in on a rescue deal led by state-run banks.
Goyal’s stake will be cut to 25.5 percent from the current 51 percent, while Etihad Airways’ stake in the debt-laden carrier will also be halved to 12 percent to make room for the banks to take a controlling stake of 50.5 percent in the airline, one of the TV channels, ET Now, reported, citing unnamed sources.
Saddled with debt of more than $1 billion, Jet owes money to banks, suppliers, pilots and lessors – several of whom have started terminating leases with the carrier.
The government has asked state-run banks, led by SBI, to rescue Jet without pushing it into bankruptcy, two people within the Indian government have told Reuters that Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election.
The reports of Goyal’s departure led to a rally in Jet’s shares of more than 12 percent.
The biggest full-service carrier in India, has been under dark clouds for the past few months.
Here’s how the story unfolded
May 3 – Jet shares fall 12.3 percent after InterGlobe Aviation reported a slump in net profit for March-quarter a day earlier
May 23 – Jet posts first quarterly loss in at least 12 quarters, says it has a negative net worth that ‘may create uncertainties’
Aug 1 – Media report says Jet asked employees to take an up to 25 percent cut in salaries as a part of a cost cutting measure
Aug 3 – Jet denies report that it cannot fly beyond 60 days, and dismisses conjecture of stake sale
Aug 9 – Airline defers board meet for first-quarter results
Aug 11 – After State Bank of India chairman says Jet’s loan is on the bank’s watch list, Jet says it is regular in payment obligations to all banks
Aug 13 – Airline reaffirms that it is considering various options to meet its funding requirements
Aug 15 – Report says U.S. private equity firm Blackstone Group LP is in talks to buy a stake in Jet’s frequent-flier loyalty programme JetPrivilege
Aug 20 – Sources tell Reuters that private equity firm TPG Capital is considering investing in Jet, but is not close to finalising a deal
Aug 27 – Jet posts loss for the June-quarter, says it will inject funds and cut costs by more than 20 billion rupees in two years
Sept 4 – Government plans relief package for airlines
Sept 6 – Jet says it paid salaries to 84 percent of its employees after reports emerge that pilots warned ‘non-cooperation’ over salary default
Sept 20 – Income Tax department conducts survey at Jet’s premises
• Over two dozen passengers on a Jet flight are treated for minor injuries after the plane loses cabin pressure
Oct 4 – Rating agency ICRA downgrades here the company’s long term loans and NCDs, citing impact of steep increase in jet fuel prices, rupee depreciation, delay in implementation of liquidity initiatives
Oct 18 – Report says Indian conglomerate Tata Group is in talks to buy stake in Jet. Jet calls report “speculative”
Oct 30 – U.S.-based Delta Air Lines Inc expresses interest to buy Jet stake from promoter Naresh Goyal and Etihad Airways
Nov 5 – Report says Tata aims to buy the 51 percent stake in the airline owned by Naresh Goyal, and Etihad Airways’ 24 percent stake, and merge Jet with Vistara
Nov 12 – Jet posts third straight quarterly loss, chief executive officer Vinay Dube expresses confidence in overcoming current challenges
Nov 13 – Tata Sons begins due diligence to buy Jet, reports say
• Jet executive says company is in talks with multiple parties for a stake sale in its loyalty program, and equity infusion in the airline
Nov 15 – Shares surge nearly 25 percent following reports that the debt-laden airline was nearing a rescue deal with Tata Sons; another report says the Indian government asked Tata to explore buying Jet
Nov 16 – Tata Sons says discussions on Jet is preliminary and no proposal has been made
Nov 20 – Tata Sons may go slow on Jet deal after some directors from Tata’s board expressed concerns, according to media reports
Nov 21 – The airline says news on Naresh Goyal, Etihad discussing merger of JetPrivilege with Jet Airways is speculative
Nov 22 – Independent director Ranjan Mathai resigns, citing rising pressure from other commitments.