The board of struggling Jet Airways Ltd, which recently defaulted on debt repayment, has agreed to give lenders the majority stake of 50.1 per cent by converting part of its debt into equity as part of a resolution plan worked out by lenders.
In a stock exchange filing, the loss-making airline said the board, as part of a bank-led provisional resolution plan, agreed to allot 11.4 crore shares at an aggregate value of Re 1 to the lenders’ consortium led by State Bank of India. After the conversion, the lenders will end up owning 50.1 per cent in the carrier controlled by Naresh Goyal. As a result, equity holding of Goyal and Etihad Airways will come down by half to 25 per cent and 12 per cent, respectively.
The resolution plan allows the lending consortium to nominate members on the board. The company called an extraordinary general meeting on February 21 for shareholder approval.