The Indian Wire » Business » Banks, government to own majority stake in Jet Airways post restructure; Naresh Goyal set to lose control
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Banks, government to own majority stake in Jet Airways post restructure; Naresh Goyal set to lose control

Jet Airways, debt-ridden airline seems to have another lifeline with NIIF (National Investment and Infrastructure Fund) and Etihad (existing investor with 24% stake) investing over ₹3000 crores. However, the investors together will own more than a majority stake with Naresh Goyal losing his board seat and managerial control. The development will also see Naresh Goyal’s equity drop down from 51% to 20%.

If the sources are to be believed, lending banks led by SBI will convert their existing loan worth ₹600 crores in equity. This will take the stake owned by public sector banks to 32%. NIIF, a fund owned by government of India to invest in building infrastructure, which will own 19.5% of the equity post an investment of ₹1400 crores. Etihad will invest another ₹1400 Crores and settle for 24.9% equity to avoid an open offer.

The remaining debt of over ₹6000 Crores, which Jet owes to various public sector banks in India, will be restructured and converted to a 10 year long-term debt.

The development, if confirmed, will give a much needed spike to Jet Airways. Aviation market in whole hasn’t been in best of shape since the last few years as Indigo has also been facing shortage of pilots due to delayed payment in dues. Air India has been in trouble for long and is the government is considering disinvestment as well as partnering with Private players to keep the national airways flying.

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