Kathmandu, March 27

Finding a sustainable solution to the turnaround of Jet Airways has been receiving the attention of all stakeholders to enable the airline to restore normalcy to its level of operations, the company said in a statement. As part of the proposed solution, the Board of Directors of Jet Airways met on Monday and approved a few crucial decisions.

The board has approved the conversion of INR one of lenders’ debt into equity by the issuance of 114 million equity shares, in accordance with the Reserve Bank of India’s circular of February 12, 2018. With this, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways.

The meeting also decided to reconstitute the Board of Directors of the company with the resignation of promoter Naresh Goyal, Anita Goyal and Kevin Knight, nominee director of Etihad Airways from their positions on the company’s board. Meanwhile, the two nominees of the promoter and one nominee of Etihad Airways will continue on the board. Moreover, two lender nominees will be inducted to the board, subject to the receipt of requisite approvals.

As part of the resolution plan, the lenders will provide an immediate interim funding support of INR 15 billion to Jet Airways. The company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner.

The move will thus see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline’s long term transformation to continue expansion and to regain its position as a global player.

An Interim Management Committee (IMC) has also been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey & Co.

The airline’s robust and long-term operating plan focuses on revenue enhancement and cost optimisation as the fundamental pillars of building a healthy, growing and durable airline. The plan addresses a cross-section of areas in addition to an operating plan, which takes advantage of the airline’s fleet, its resources, slots and its network.

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.