Jet Airways’ Shareholders Approve Debt Recast Plan
Shareholders of Jet Airways (India) Ltd. voted in favour of all resolutions at its extraordinary general meeting, paving the way for a bank-led debt recast plan to be executed by the beleaguered airline.
The five resolutions—that include boosting share capital, allowing lenders to appoint directors on the board and convert loans into shares—were passed by over 98 percent of the shareholders, according to its stock exchange filing.
On Feb.14, Jet Airways said that the board of the company had approved a provisional bank-led resolution plan under which the cash-strapped carrier would issue 11.4 crore shares to lenders at an aggregate value of Re 1.
The conversion will bring down Naresh Goyal and Etihad Airways’ stake by half to 25 percent and 12 percent, respectively, according to BloombergQuint’s calculations. The resolution plan allows the lending consortium to nominate members on the board.
The airline, which has a debt of over Rs 10,900 crore, defaulted on repayments and struggled to pay salaries as higher fuel prices and low fares in a competitive market left it short of cash. The new plan seeks to avail additional interim credit from domestic lenders.