Mumbai: Shareholders of Jet Airways (India) Ltd are likely to have approved banks’ bailout plan for the debt-laden airline at Thursday’s extraordinary general meeting (EGM), a person who attended the meeting said. The Jet Airways bailout plan will see conversion of debt to equity in favour of lenders.
“A large majority of the shareholders present at the EGM have approved the proposals in person,” the person mentioned above said, on condition of anonymity.
Shareholders voted for the resolution both in person and online, the person said.
Jet Airways founder and chairman Naresh Goyal and many board members were not present at the EGM, while whole-time director Gaurang Shetty was present. The airline’s chief executive officer Vinay Dube and chief financial officer Amit Agarwal were also in attendance.
“Several shareholders were apprehensive about banks becoming majority shareholders in the airline and some even asked if banks will take over management in the future,” the person said. “Others sought answers from the company on several issues such as the future of chairman Goyal in the airline.”
Jet Airways has been struggling with cash flows for the past six months because of rising fuel costs and intense competition. It has delayed payment to lessors, airport operators, oil marketing companies, and a part of its staff to keep the airline in the skies.
Jet Airways had a gross debt of ₹8,411 crore as of September-end, including aircraft debt of ₹1,851 crore.
The Jet Airways bailout plan led by the banks and approved by the board of Jet Airways on 14 February proposes restructuring under central bank guidelines to meet a funding gap of nearly ₹8,500 crore.
The gap is to be met through a mix of equity infusion, debt restructuring, sale, SLB (sale and lease back), and refinancing of aircraft, among others.
The Jet Airways bailout plan approved last week would allow domestic lenders, led by State Bank of India, to convert their loans into equity, making them the largest shareholders of Jet Airways.
On Thursday, Jet Airways shares rose 0.82% to ₹234.85 apiece on the BSE while the benchmark Sensex gained 0.40% to close at 35,898.35 points.