India’s largest lender State Bank of India (SBI) is set to take an equity stake of at least 15 percent in Jet Airways India Ltd. as lenders to the carrier plan to convert part of their loans into equity, people with knowledge of the matter said.
Under a new rescue deal in the works, the nation’s biggest full-service airline’s founder Chairman Naresh Goyal’s stake will fall below 20 percent from the current 51 percent, the people said, asking not to be identified as the information is not public. Etihad Airways PJSC, the current equity partner with 24 percent stake, is expected to infuse additional funds to take its total holding to more than 40 percent, they said.
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. Jet Airways has called an extraordinary general meeting on Feb. 21 in Mumbai, to seek shareholders approval to increase authorized share capital of company by issuing equity and preferred shares.
No final decision has been taken, the people said. Spokesmen for SBI and Jet didn’t immediately respond to emails seeking comment.
The carrier is working on “various options on the debt-equity mix, proportion of equity infusion," the airline said in a statement on Jan. 16. adding the restructuring may lead to a change in the board of the company.
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