Jet Airways founder Naresh Goyal steps down amid crisis

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Jet Airways founder Naresh Goyal steps down amid crisis

Naresh Goyal will cease to be the chairman of the company, Jet Airways said.

Jet Airways, its employees both past and present, shareholders, partners, regulators, and most importantly our dear guests, are our family and there is no sacrifice both Anita and I would not make to ensure that the best interests of our Jet Airways family are safely secured. "Key strategic decisions are required now", Kaul said.

The SBI-led consortium of lenders is working on a resolution plan for the cash-strapped Jet Airways for the last five months.

Bidding process to be initiated by lenders for sale to new investor (s), the process expected to be completed in June quarter as per the resolution plan. Besides, the lenders would nominate two members on the airline's board. My expectation is 31 is open for everyone whosoever wants to come in. Shares of Jet Airways had jumped over 15% on the National Stock Exchange after the news reports, and closed the day at Rs 261 per share.

"It is critical to have a world class board led by a chairman with proven credentials", Kaul said, adding that the short timeline for the lenders' plan to sell their controlling stake was also ambitious unless they have an investor in mind.

The board has also approved issue of 11.4 crore equity shares to the Airline's lenders upon debt to equity conversion of Re 1/ of the outstanding debt.

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Goyal's exit as chairman brings an end to an era during which he built Jet into one of India's leading airlines with more than 120 planes, enviable landing slots and flights to places such as Hong Kong, Dubai, Paris and London.

Jet has survived collapse once before when it also got close to running out of cash in 2013.

According to reports, Etihad's stakes in the company will be halved from 24 per cent to 12 per cent while Goyal's stake will be reduced to 25.5 per cent from the existing 51 per cent.

But competition from low-priced carriers, such as IndiGo and SpiceJet Ltd, together with high oil prices, hefty fuel taxes and a weak rupee piled on the pressure in recent months.

Referring to the latest developments, Singh, who is the Chairman and Managing Director of budget carrier SpiceJet, also said it was a wake-up call for the country's policymakers to address structural challenges that is making domestic airlines uncompetitive.

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