Jet Airways share price surged for second day in a row, rising as much as 8.80 per cent to Rs 276.90 on the BSE after its board of directors and lenders reached a resolution plan to save the cash strapped airline from falling into bankruptcy. Jet Airways' board of directors approved converting lenders' debt into equity by issuing 11.4 crore shares at 1 rupee to a consortium of banks led by the State Bank of India, the company said in an exchange filing post market hours yesterday.
The airline also announced that its founder Naresh Goyal and his wife Anita Goyal stepped down from board of directors. The exit of Naresh Goyal and Anita Goyal, from the board of the airline they founded 25 years ago, came as part of the resolution plan to rescue the debt-laden Jet Airways from falling into bankruptcy.
As part of the resolution plan, lenders will provide an immediate funding support of Rs 1,500 crore by way of debt instrument against security of its assets which will restore normalcy to company's level of operations, the filing added.
"The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner," Jet Airways said in a press release.
"The move will 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," the airline added.
Saddled with more than $1 billion of debt, Jet is struggling to stay afloat. Jet owes money to banks, suppliers, pilots and lessors - several of whom have started terminating leases with the carrier.
As of 9:52 am, Jet Airways traded 6.72 per cent higher at Rs 271.60. The stock saw heightened trading volumes, as many as 21.55 lakh shares were traded on the BSE compared with an average of 12.39 lakh shares traded daily in the past two weeks. In yesterday's session Jet Airways share price rose 13 per cent.
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