Jet Air seeks investor nod to swap debt for shares


NEW DELHI • Jet Airways India Ltd is seeking the approval of shareholders to convert loans into equity as the ailing carrier saddled with US$1.1 billion (RM4.52 billion) of debt negotiates a rescue deal with its lenders and partner Etihad Airways PJSC.

India’s biggest full-service carrier has called an EGM on Feb 21 in Mumbai, during which it will also seek consent for lenders to appoint company directors and boost its capital, according to a filing yesterday.

The airline, 24%-owned by Etihad, didn’t say whether the three sides have reached an agreement over the terms of the rescue.

Jet Airways, Etihad and lenders have been in talks for weeks to work out a revival plan, although no commonly agreed proposal was presented to the government, a ministry official said on Jan 25 in New Delhi.

The Mumbai-based carrier has struggled with low fares in an increasingly competitive market, losing money in all but two of the past 11 years.

Lenders led by State Bank of India, the country’s biggest lender by assets, have sought 35 billion rupees (RM2.02 billion) of investment from founder Naresh Goyal and Etihad before they can revamp its debt, people with knowledge of the matter said earlier this month. Jet Airways said on Jan 16 it was considering “various options on the debt-equity mix”.

Shares of the airline fell 3.3% to 244.80 rupees in Mumbai yesterday, their lowest level in more than two weeks. They have dropped 67% in the past 12 months. — Bloomberg