Shareholders of distressed airline Jet Airways have approved the resolution plan to rescue the airline, with over 97 percent approval for each of the items.
The voting was held on February 21.
The approval was important to take forward the rescue plan for the airline, which has defaulted on loan repayments and further faces a stiff payment schedule.
Jet Airways gets shareholders nod for resolution plan
Nearly 98 percent of the shareholders approved the allotment of 114 million fresh shares. Nearly the same percentage of them also approved the alteration in the Articles of Association, and alteration in the ‘Object Clause’ of Memorandum of Association of the company.
The shareholders approval also came for conversion of debt into equity.
With this, the shareholding of promoter Naresh Goyal will reduce from 51 percent, to nearly 25 percent. And that of Etihad Airways will come down to 12 percent, from the present 24 percent.
The stage is now set for fresh infusion of liquidity into the company, which will see the banks taking control of the airline. Etihad and Goyal, both are also expected to put in more money.
The liquidity is important as the company faces a stiff repayment schedule for its over Rs 8,000 crore debt. It needs to repay about Rs 1,700 crore by the end of March. While the company has partly done the scheduled repayment, there are substantial overdue.
Jet’s Board of Directors on February 14 had considered and approved a Bank Led Provisional Resolution Plan (BLPRP), which currently estimates a funding gap of around Rs 8,500 crore (including proposed repayment of aircraft debt of around Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale/sale and leaseback/refinancing of aircraft, among other things.
“The BLPRP will be presented for consideration of each of the following: (i) the consortium of Lenders (ii) the Overseeing Committee of the Indian Bankers’ Association (iii) the Board of Directors of Etihad Airways, and (iv) the Promoter,” the company had said.
The investors and stakeholders will now be waiting for the company to announce the possible deal.