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Jet Airways founder Naresh Goyal to quit as Chairman today

Jet Airways Chairman Naresh Goyal and his wife Anita Goyal are expected to step down from the board of the cash-strapped airline on Monday, March 25, sources told Moneycontrol. Chief Executive Vinay Dube is expected to stay on board the 25-year-old airline Goyal set up with his wife in 1993.

On March 20, Moneycontrol reported that Jet Airways’ lenders had worked out an alternate rescue plan for the debt-ridden airline, which involves taking majority control and reconstituting the entire board of the country’s second largest carrier.

With just 11 days left to the end of this financial year, lenders are in a rush to seal a resolution plan. They have asked Goyal to step down immediately and make way for a new management. As per the plan, Goyal’s stake will likely be capped at 10 percent by diluting the rest at a nominal value.

There are also talks of new investors including Tata Sons being approached, but a source told Moneycontrol it will take at least a couple of months to bring them in, as regulatory norms require due diligence on the part of the lenders too.

Earlier this month, Reuters had reported that Goyal had agreed to step down as Chairman and reduce his 51 percent stake in the airline. The report had said that Jet Airways’ lenders may invoke Goyal’s entire stake in the airline, and start looking for a new buyer in the coming weeks.

Saddled with more than $1 billion of debt, Jet Airways is struggling to stay afloat. It has delayed payments to banks, suppliers, pilots and lessors – some of which have forced the airline to ground as many as 40 planes.

Jet Airways has survived a near-death experience once before; in 2013, Abu Dhabi’s Etihad Airways injected $600 million of capital for a 24 percent stake in the airline, three London Heathrow slots and a majority share in its frequent flyer programme. The infusion helped the airline pare down its debt and fight growing domestic competition.

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