Jet stocks soar 17% as rescue plan kicks in

Mumbai, March 25 (IANS) Jet Airways' stocks jumped over 17 per cent on Monday, but settled nearly 13 per cent higher at Rs 254.50 per share after Naresh Goyal quit the board and the ailing Jet said it will get an "immediate funding support" of Rs 1,500 crore from the lenders.

"Two nominees of promoter Naresh Goyal and Anita Goyal, and a nominee of Etihad Airways Public Joint Stock Companies (PJSC) to step down from the Board. Additionally, Naresh Goyal to also cease to be the Chairman of the Company," said the company in a statement.

Besides, the company also announced that it would receive an "immediate funding support" of up to Rs 1,500 crore by lenders for operational requirements.

"Jet Airways rose on reports that the current promoter Naresh Goyal and his wife quit the board under pressure from the lenders. This will pave the way for the lenders to look for change of hands and in the meanwhile infuse capital to ensure that the Airlines continues to run," said Deepak Jasani of HDFC Securities.

"The board also approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt."

According to industry estimates, Jet's total debt stood at Rs 8,000 crore. The company urgently needed funding to maintain whatever was left of its market shares, as the airline pilots and crew were said to be approaching other airlines for employment.

The airline's pilots along with engineers and other highly critical segment of employees have not been paid salaries from January 1, sources said, adding only 12.5 per cent of December pay was given.