January 14, 2019 / 9:31 AM / 10 days ago

India's Jet Airways shares jump after report chairman likely to step down

MUMBAI, Jan 14 (Reuters) - Shares in India’s Jet Airways jumped over 18 percent on Monday after a report that founder and chairman Naresh Goyal was likely to step down from the board of the embattled company and give up majority control.

CNBC TV18, citing sources, reported on Monday that Jet was likely to finalise a resolution plan with its lenders this week, and that Goyal would trim his 51 percent stake to 20-25 percent and agree to voting rights on his stake being capped at 10 percent, in a bid to save the debt-laden carrier.

The report also said Etihad may infuse capital into Jet and raise its stake from the 24 percent it currently owns.

Jet and Goyal did not immediately respond to emails seeking comment.

Cash-strapped Jet early in the month said it had defaulted on debt payments to a consortium of Indian banks and that it was in talks with the consortium led by State Bank of India .

The 25-year-old airline is facing financial difficulties and owes money to pilots, lessors and vendors. Intense pricing competition, a weak rupee and rising fuel costs weighed on Indian airlines in 2018.

Last week, Reuters reported that crisis talks between Jet and aircraft lessors had failed to ease the row over late payments, prompting some lessors to explore repossessing their aircraft. (Reporting by Swati Bhat and Aditi Shah; Editing by Subhranshu Sahu)

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