'Naresh Goyal did not pledge 51% stake in Jet'

While the reason for pledging of shares was not disclosed, this came at a time when the aviation sector is going through tough times.

Jet Airways on Wednesday said its promoter and chairman Naresh Goyal will not dilute his equity stake in the airline below 51 per cent at anytime -- a comment that comes a day after the disclosure about encumbrance of his entire holding.

In a statement the airline said that the undertaking given to PNB is "an undertaking of non-disposal of any further equity and not a matter of pledging of his shares".

"Jet Airways would like to categorically state, for the benefit of all its stakeholders, that the undertaking given to PNB implies that the airline's promoter and chairman will not dilute his equity, by way of a sale, below 51 per cent at any time, and will continue to be the majority shareholder in the airline," it said.

The statement follows a regulatory filing made by Jet last evening wherein it was disclosed that Goyal has created an 'encumbrance' on all his 57,933,665 shares, constituting 51 per cent stake, in the airline effective January 8 to PNB with a 'non-disposal undertaking'.

A pledge with such an undertaking means that the bank can't sell these shares and the holding would continue to remain in the name of the person or entity pledging the shares.

While the reason for pledging of shares was not disclosed, this came at a time when the aviation sector is going through tough times. Low-cost carrier SpiceJet is currently in financial trouble, while Kingfisher Airline has been grounded since October 2012.

Air fuel prices have come down in the recent past due to falling crude price, but they still remain very high and other operating costs also steep in this business.

A new player Air Vistara recently entered the sector as a full-service carrier, intensifying the competition and triggering a fresh round of airfare war -- a frequent phenomenon in this otherwise ailing sector.

United Arab Emirates-based Etihad holds 24 per cent stake in Jet as a strategic partner which it bought last year, while the remaining shares are owned by institutional and retail investors.

The Jet stock was trading about 0.5 per cent down at Rs 462, after recouping initial losses.

Image: (Top) A Jet Airways aircraft; (bottom) Naresh Goyal. Photographs: Reuters