Mumbai: Jet Airways (India) Ltd promoter Naresh Goyal’s son Nivaan Goyal, who has been playing an active role in negotiations with lenders, is likely to be inducted into the cash-strapped airline’s board of directors, a person with direct knowledge of the matter told Mint.
Nivaan Goyal is likely to be elevated as a board member soon, said the person who asked not to be identified, adding that Jet Airways lenders and shareholder Etihad Airways PJSC have supported the elevation.
“Lenders don’t want a situation where only they have to deal with Etihad. This is why they supported Nivaan’s elevation to the board," the person said, adding that Nivaan Goyal could be elevated to the executive director’s position in the board in the coming days.
Nivaan Goyal has led Jet Airways delegation for meetings with lenders on the last two occasions, the latest being on 27 February, when lenders were informed that founder Naresh Goyal had agreed to step down from the airline’s board as its chairman as part of a plan to secure a rescue deal for the company.
“During the last two meetings of the airline’s management with lenders, it was Nivaan Goyal, and not Naresh Goyal, who was present during negotiations with the lenders," said a banker who didn’t want to be identified.
“It seems he’s (Nivaan’s) set for a bigger role at Jet Airways," the person said.
Jet Airways, Etihad and State Bank of India (SBI) didn’t immediately respond to queries.
Mint on Thursday reported that Naresh Goyal has agreed to step down as chairman. However, Etihad Airways, which owns 24% in Jet Airways, is still to agree on several proposals put forward by a group of lenders led by SBI.
“The bank-led provisional resolution plan is very critical to the long-term viability and sustainability of our Jet Airways and would provide in due course, a funding package," Naresh Goyal said in a letter to Jet employees sent on Friday.
“While a few steps remain, some critical steps are behind us and the remaining approval processes are well underway. I assure you that I am personally working this situation as rapidly as possible," Goyal said.
“I solemnly assure you to keep you updated when our CEO, Vinay Dube, and his team will ensure a fresh detailed update to be provided to you by the 18th of this month, by which time I am confident of the situation gently easing up in our favour," he said.
Jet Airways has been struggling with cash flows for more than six months because of higher fuel costs and intense competition. It has defaulted on interest payment to lessors, airport operators, oil marketing companies, and a part of its staff.
Shareholders last week approved the Jet Airways bailout plan, which would allow lenders to convert their debt into equity. The approval will now allow lenders to become majority stakeholders and infuse funds in airline.
However, the airline continues to face a cash crunch. In a stock exchange notification on 27 February, Jet Airways said that lessors have grounded six more aircraft because of non-payment of dues. Two more aircraft were grounded on Friday, the Press Trust of India reported, taking the total number of planes grounded to at least 21.
“...the company is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the Company to improve its liquidity. Aircraft lessors have been supportive of the company’s efforts in this regard," Jet Airways said.
Jet Airways had a gross debt of ₹8,411 crore as of end-September, including aircraft debt of ₹1,851 crore. On Friday, its shares rose 5.32% to ₹234.65 apiece on the BSE while the benchmark Sensex gained 0.55% to end the day at 36,063.81 points.