Financially-strapped Jet Airways may have bought some breathing space through plans to convert debt owed to lenders into equity, but that may not be great news for the lenders themselves. Late last week, the airline’s board approved the debt-equity swap plan that would make a consortium of lenders led by State Bank of India (SBI) the largest shareholder in the airline. Jet Airways has more than $1.2 billion in debt, a quarter of which is owed to SBI alone. Although details are not available, reports suggest that lenders would take up a controlling stake either among themselves, or together with the National Investment and Infrastructure Fund, which is a government-run body set up to invest in infrastructure projects. In short, the government appears set to take indirect control of the private airline.
