Mumbai, May 14 Top executives of Jet Airways including its Chief Executive Officer have resigned from the company in an indication that the airline may be heading towards insolvency proceedings.

CEO Vinay Dube; CFO Amit Agarwal; Company Secretary and Compliance Officer Kuldeep Sharma; and Chief People Officer Rajhul Taneja have quit the company, citing personal reasons.

This comes a day after Jet Airways’ lead lender SBI opened the bid placed by Etihad Airways and found it short of expectations. Ray Gammell, Senior Strategic Advisor to the Group CEO of Etihad, and Carmer Ball, Jet Airway’s ex-CEO, met top SBI officials on Tuesday to try and salvage a deal.

It is estimated that ₹8,000 crore will be needed to resurrect the airline. Jet’s total debt is over ₹14,000 crore.

Though Etihad has submitted a bid, it is willing to remain only a minority shareholder, leaving it to the lenders to look for a majority partner.

Insolvency process

If the lenders are unable to find a big investor soon, the only option would be to take the airline to an NCLT-led insolvency process. Sources said that with four of the top management quitting, lenders will have to bring in new managers. But they may find it difficult to recruit anyone due to legal issues involved with salary payments and vendor dues.

“Even if it’s not operational, the company needs to be preserved during the hibernation period. The lenders may have to look for someone from within the company who can take charge. However, it is important to preserve the data and cost records of the company,” said a source.

The lenders will also review the unsolicited bids from two parties. “The lenders need to ascertain whether the bids are true or not. There will be an investing audit to ascertain whether there is bad money coming in or if it is legitimate. The probability of the airline being resurrected is low at the moment,” said another source close to the bankers.

Overseas staff terminated

Meanwhile, Jet has terminated over 50 local and Indian employees in South-East Asia, West Asia, Europe and the UK. Mohammad Mansoor, Customer Service Executive, Doha region, said: “We are 10 permanent and contractual employees...all of us including the country manager got the termination letter. Our reservations and sales team were not directly on the Jet payroll. Ten of them are also unemployed now.”

 

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