Jet Airways founder Naresh Goyal may step down as chairman today

Jet Airways founder Naresh Goyal steps down amid crisis

The government has asked state-run banks, led by SBI, to rescue Jet without pushing it into bankruptcy, two people within the Indian government have told Reuters, adding that Prime Minister Narendra Modi is seeking to avert thousands of job losses weeks before a general election.

Naresh Goyal's resignation will likely pave the way for potential investors to save India's oldest private carrier. "If a Jet stock is worth Rs 250 today, there should have been a debt reduction of at least Rs 2,750 crore by conversion of these 11.4 crore shares", he argued. The company's lenders will nominate two members to the board. The lenders will also infuse Rs 1,500 crore ($217.6 million) into Jet via fresh loans in a bid to restore normalcy to operations.

Saddled with more than $1 billion of debt, Jet is struggling to stay afloat.

The company made the statement in an exchange filing hours after news reports that made similar claims.

Meanwhile, Etihad may remain on Jet's board for now, but its 24 per cent equity stake in the airline is expected to be diluted over the course of time.

According to the airline, as part of the resolution plan, the lenders will also begin the process of sale/ issue of shares to new investors which is expected to be completed in the June quarter.

"I believe that the employees, including the pilots, engineers, cabin crew and front-end staff are taken into confidence by the new management so that they assist in the turnaround plan", he said, adding personally he feels very sorry for the man who was intrinsically entrenched in every part of the product and services of the airline.

After Monday's meet, it was decided that Goyal's stake will be cut to 25.5 percent from the current 51 percent, while Etihad Airways' stake in the debt-laden carrier will also be halved to 12 percent to make room for the banks to take a controlling stake of 50.5 percent in the airline. But on Monday, some reports also said Air India Chairman Ashwani Lohani was in race to head Jet in the interim.

At present, Jet Airways is operating with just 41 planes out of its fleet of 119 planes after failing to repay rentals.

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