Jet Airways' share has been rigorously performing well in green for the past 3 days and has consecutively risen 27 per cent in the period.
After opening with a gain of 4.22 percent at Rs. 265.25, Jet Airways share surged 9.6 per cent to Rs. 279 on BSE and Rs. 278.90 on NSE against the previous close of Rs. 254. Not only the stock has outperformed the sector by 9.09 per cent, but is also quoting a near-two months high (since January 22, 2019, at Rs. 278.95) today.
Yesterday , Jet Airways' shares rallied 18 per cent in intra-day trade reacting to the news of company's Chairman Naresh Goyal and his wife Anita Goyal resigning from the board of directors.
As part of the Resolution Plan released on Monday, the SBI-led consortium of banks has possessed the majority stake in the airline of just over 50 per cent and will further provide immediate interim funding support of INR 1500 crore to Jet Airways in order to engage with payment intermediaries for the release of trapped cash. It will also form an Interim Management Committee (IMC) to oversee the financial and operational performance of the airline.
Moreover, the Board of Directors' reconstitution also involves the resignation of Mr. Kevin Knight, nominee director of Etihad Airways, the continuation of two nominees of the promoter and one nominee of Etihad Airways, and induction of two lender nominees to its board, subject to the receipt of requisite approvals.
The reconstruction plan also involves the conversion of INR 1 of Lenders' debt into equity by the issuance of 11.4 crore equity shares, in accordance with the Reserve Bank of India Circular of February 12, 2018.
As per the regulatory filing, "The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner. 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, aiding the airline's long term transformation to continue expansion and to regain its position as a global player."
This also validates that the lenders of Jet had failed to convince potential investors, including its largest shareholder Etihad Airways, to save the airline. The Lenders will begin the process of sale/ issue of shares to new investors which is expected to be completed in the June quarter.
Although the shares of Jet Airways has delivered poor returns in the one-year-period by falling at 55 percent, it has returned 42 per cent hike in 6 months period and rose almost 20 percent in one week's term.
At 2:15 pm IST, the share was up 7.7 per cent, quoting Rs.274.20 on BSE and Rs. 273.70 on NSE. The share is being traded at a volume ( higher than 5,10, and 30 day- average) of 46.28 lakh and 538.4 lakh in BSE and NSE respectively.
The release also added a statement by the ex-Chairman, Naresh Goyal, "For me, the 22,000 employees are my own family, as dear to me as Nivaan, Namrata and my wife Neeta, and no sacrifice is too big for me to safeguard the interest of Jet Airways and the families of the 22,000 employees. For the sake of my family of 22,000 employees and their respective families I have today taken the step of stepping down from the Board of Jet Airways. I became the Chairman on April 1, 1992, and my family is behind me and with me in this decision and I hope you will support my decision too. I will miss you one and all. Thank you for your brilliant dedication and loyalty down the years. I am proud of you and wish you all a great future ahead with our Jet Airways!"
(Edited by Rupa Burman Roy)