Step down with immediate effect, banks ask Naresh Goyal of Jet Airways

In a bid to revive the debt-laden carrier, the lenders led by the SBI will ask Jet Airways founder and chairman Naresh Goyal to step down from the airline with immediate effect, said sources familiar with the matter.

To protect the interest of consumers and creditors, the lenders are looking for a change in the management, sources said.

"Banks want Goyal to bring his stake down to 10 percent, below the 17 percent envisaged in the bank-led provisional resolution plan (BLPRP)," sources told CNBC-TV18, requesting anonymity. The lenders may infuse Rs 1,500 crore and they also want Jet Airways to be run by a ‘professional’, the sources added.

Goyal currently holds a 51 percent stake in Jet Airways.

Rajnish Kumar, chairman, State Bank of India, on Wednesday said the lenders will make every effort to keep Jet Airways flying and all stakeholders are in the unanimous view that the airline is a good aviation property.

With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilot, Kumar met finance minister Arun Jaitley along with aviation secretary Pradip Singh Kharola and Nripendra Misra, principal secretary to Prime Minister.

Kumar said the meeting was to appraise the government, which is an important stakeholder, about the happenings.

"An effort has been made by lenders to keep the airline running in the interest of all stakeholders and resolution plan for Jet Airways was almost ready but there is some delay," Kumar said.

On insolvency and bankruptcy code (IBC), the SBI chairman said it is the last option for Jet Airways and the bankruptcy law is nearly impossible for an industry like this.

The active fleet of Jet Airways is declining rapidly and it may go below the count of 35 by the end of the day, sources said, requesting anonymity.

Lessors have given 72-hour notice to the company for grounding planes, they said. The airline owns nine aircraft out of the current active fleet.

Meanwhile, Jet Airways chairman Naresh Goyal has recently met Qatar Airways CEO Akbar Al Baker, sources said, adding that the former is in Dubai to meet other potential investors.

Earlier, multiple sources told CNBC-TV18 that Jet Airways lenders are discussing replacing Etihad Airways with a new investor after the Abu Dhabi-based airline offered to sell its stake in the beleaguered airline. The new investor is likely to be an investment fund, added the sources.

Etihad holds 24 percent stake in Jet Airways and was widely expected to be a major helping hand for the beleaguered airline. The airline had asked for interim funding support of Rs 750 crore from Etihad to continue operations. However, the board meeting of Etihad on the matter was inconclusive.

Jet has been frequently grounding planes as it is unable to pay the dues to its lessors and is currently operating around 35 planes. The airline's operations from Mumbai to Manchester and Hong Kong will likely be suspended from March 23.

Jet has more than Rs 8,000 crore in debt and is looking for urgent liquidity infusion to pay its pilots, engineers and make payments to its lessors.

On Tuesday, the umbrella body of domestic pilots of Jet Airways threatened to stop flying from April 1 unless there is clarity on the resolution process and salary dues by end of this month.