New Delhi: State Bank of India (SBI), a lender to Jet Airways, is likely to own 15 percent of the cash-strapped carrier after the airline gets consent for a debt to equity swap, TV channels reported on Tuesday citing agencies.
Jet Airways said on Monday it would seek a shareholder nod next month to convert existing debt into equity, raise more money and allow its lenders to nominate a director on its board as part of efforts to resolve its financing problems.
Jet’s lenders could end up owning as much as 30 percent while its shareholder Etihad Airways could see its stake go up to more than 40 percent from 24 percent at present as it infuses more equity, the TV channels reported.
Meanwhile, shares of Jet Airways fell over two per cent in the afternoon trade on Tuesday amid the crisis-hit airline deciding to seek shareholders' approval for conversion of loans into shares.
Shares of Jet Airways dropped 2.36 percent to Rs 239.60 apiece in the afternoon trade on the BSE. After opening at Rs 245.50, the scrip touched a high of Rs 251.35 before shedding the gains.
Jet Airways, saddled with debts of about $1.14 billion, has been hit by fierce competition, rupee depreciation and high oil prices.
The company owes money to banks, pilots, vendors and lessors - some of whom are considering taking back aircraft, sources have told Reuters.
The airline will seek a green light from shareholders to convert part or all of its loans into equity at a special meeting on 21 February, subject to regulatory approval.
It will also seek permission to convert future loans into equity, the airline said in a regulatory filing.
Jet, which controls a sixth of India’s booming aviation market, will also seek approval to issue new equity and allow its lenders to nominate directors to its board, it said.
The airline plans to increase its share capital to Rs 2,200 crore ($309.43 million) from Rs 200 crore. The company did not say how much debt it is planning to convert into equity.
— With PTI inputs
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Updated Date: Jan 29, 2019 15:44:47 IST