Etihad Airways which owns about 24% stake in beleaguered Jet Airways along with new investors will be infusing fresh fund of about ₹4,000 crore to revive the airline which has been grappling with lack of liquidity and rising debt.
With this, the exit of Founder-Promoter Naresh Goyal and his wife from the board and all executive positions is final. If the proposal is accepted, Naresh Goyal will become Emeritus chairman while his Son Nivaan Goyal will be assuming executive role.
As per the draft proposal is being discussed by the various stakeholders, the lenders will be converting a portion of loan into equity and airlines’s 51% stake in Jet Privilege would be pledged to raise money. The proposal does not name the new investor but as per various reliable media reports, National Investment and Infrastructure Fund (NIIF) is the new investor.
If the ongoing proposal is accepted then Etihad and NIIF will have a major say on the board. Both are infusing fresh funds of ₹1900 crore each and out of which gulf based airline-Etihad will be giving ₹750 as interim funds. Etihad Airways stake is likely to be at 24.9%.
Naresh Goyal has already invested ₹250 crore into Jet, along with an additional ₹450 crore — towards liabilities of promoter groups — will be converted into equity shares. As per the proposal Goyal’s stake will be capped at around 22% while NIIF will own around 20% in the airline.
NIIF is a sovereign fund created by the government to enhance infrastructure financing in the country.
Earlier in the week, Goyal wrote a letter to Gulf-based Etihad Airways group CEO Tony Douglas seeking an urgent funding of ₹750 crore. Further in the letter, Goyal asked for dropping the word “perpetuity” in the clause related to capping his family’s stake-holding at 22%.
He also sought an urgent funding of ₹750 crore, so that a matching contribution from banks is disbursed. Goyal alluded to a “precarious position” with more than 50 aircraft grounded and “increasing arrears” of vendors and salaries.
People close to Naresh Goyal and his family say that the founder of Jet Airways is not likely to give up his stake in the founded airline so easily.