Jet stocks soar 17% as rescue plan kicks in
Mumbai: 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.
The stock jumped 12.69 per cent to close at Rs 254.50 on the BSE. During the day, it rose sharply by 17.77 per cent to Rs 266. On the National Stock Exchange (NSE), shares zoomed 15.46 per cent to close at Rs 261 apiece.
On the traded volume front, 33.60 lakh shares were traded on the BSE and over 4 crore shares on the NSE during the day.
"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.
"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."
The decision was taken at the airline's board meeting held in Mumbai Monday. While the airline made an official announcement about the board's decisions after the markets closed, reports have been doing the rounds since morning that Goyal would be stepping down from the board.
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. Abu Dhabi-based Etihad is a strategic partner with 24 per cent stake in Jet Airways.
Jet Airways, which has been operating for more than 25 years, is grappling with financial crunch and is also looking to raise fresh funds. The airline has suspended operations on at least 14 international routes till the end of April and over 80 planes are on the ground. As many as 54 aircraft have been grounded due to non-payment of lease rentals.