Jet Airways Seeks Shareholder Nod To Convert Loans Into Equity
Jet Airways India Ltd. is seeking shareholder nod for allowing banks and financial institutions to have a say in the operations of the airline by converting loans into shares.
The airline is seeking shareholder approval through a special resolution to increase its authorised share capital to Rs 2,200 crore from Rs 200 crore, according to its stock exchange filing. The move will give it more room to issue fresh shares to lenders.
The company is seeking approval from shareholders to increase the limit of authorised share capital from:
- 18 crore equity shares to 68 crore.
- 2 crore preference shares crore to 152 crore.
The extraordinary general meeting will be held on Feb. 21 in Mumbai.
Jet Airways defaulted on bank payments due on Dec. 31 amid a cash crunch. The Naresh Goyal-led airline, which has a debt of over Rs 10,900 crore, must repay nearly Rs 1,700 crore by the end of the current fiscal. The move to seek shareholder nod for converting loans to equity comes after BloombergQuint reported that Etihad Airways, which bought 24 percent in Jet Airways in 2013, said it was willing to infuse capital if Goyal quits the board.
The airline is now seeking to amend its memorandum of association to allow nominees of banks and financial institutions on its board. That’s not allowed currently and as per the terms of financing with lenders, the company will insert a new clause.
It is now proposed to insert Clause 45A in the Articles of Association of the company providing for such appointment of directors nominated by the lenders.Jet Airways’ EGM Notice
Shares of Jet Airways fell as much as 3.18 percent to Rs 245 apiece before paring losses. The stock has lost 67 percent of its value in the last one year.