Jet Airways shares jump after chairman Naresh Goyal agrees to stand down from board

Jet Airways chairman Naresh Goyal is to step down from the board of the India airline, as state-run banks move in on a rescue deal.

Goyal will also reduce his stake in the Indian carrier, which has run into financial trouble and is struggling to pay employees, suppliers and leasing companies. Its debt exceeds $1bn (£750m).

In a statement made to the Bombay Stock Exchange, Jet Airways said it had secure "immediate funding support" of 1,500 crore (£159m) to "restore normalcy" to the airline's operations.

Jet Airways shares were up nearly 16 per cent at the time of writing.

Jet Airways' lenders include the State Bank of India (SBI), among others, which will convert their debt into equity and take a controlling stake in the airline for a token sum of 1 rupee.

Jet Airways said its lenders would start a bidding process to sell their stake in the airline to a new investor, with the process expected to be completed by the end of June.

Reuters reported that the government has asked the state-run banks, led by SBI, to rescue Jet without pushing it into bankruptcy.