Mumbai: Jet Airways Ltd said on Saturday that its shareholders have given the nod for a bailout plan to convert existing debt to equity, the carrier said in a statement on the BSE. According to Jet, over 97 percent of the company’s shareholders approved the allotment of 114 million fresh shares. More than 99 percent of shareholders also approved the debt-laden carrier’s proposal to alter the Articles of Association, and ‘Object Clause’ of Memorandum of Association.
The bailout plan proposed by lenders was approved by the majority of shareholders during the voting at an extraordinary general meeting (EGM) in Mumbai on February 21, both remotely and physically.
SBI-led lenders to be majority stakeholders
The bailout plan will allow the lenders, led by the State Bank of India, to become majority stakeholders, permitting them to infuse funds into the carrier. Founder Naresh Goyal’s stake in the airline will consequently drop down to about 25 percent from 51 percent as Etihad Airways’ share will reduce to 12 percent from 24 percent.
As a result of rising fuel costs and intense competition, India’s biggest full-service carrier by market share has been grappling with financial woes for nearly six months and owes money to banks, pilots, vendors and lessors. As of September-end, the carrier had a gross debt of Rs 8,411 crore, including aircraft debt of Rs 1,851 crore.
The bailout plan, which was approved by Jet Airways board on February 14, proposes the restructuring of debt under Reserve Bank of India (RBI) guidelines to meet a funding gap of around Rs 8,500 crore.