Mumbai: Shareholders of Jet Airways (India) Ltd have approved banks' bailout plan, the airline said in a statement o the BSE on Saturday morning.

According to the company's statement, 97.99% of Jet Airways shareholders approved the allotment of 114 million fresh shares. The company's proposal to alter the Articles of Association, and 'Object Clause' of Memorandum of Association of the company were also approved by over 99% of shareholders.

The airline's proposal to let lenders convert debt into equity was approved by over 97% shareholders, the company said.

The voting, which was held on 21 February, both remotely (e-voting) and physically, at an extraordinary general meeting (EGM) held in Mumbai, saw the bailout plan proposed by lenders approved by the majority of shareholders.

The approval will now allow lenders led by the State Bank of India (SBI) to become majority stakeholder in the airline and also infuse funds in the cash-crunched airline.

As a result, founder Naresh Goyal's stake in the airline will reduce from 51% to around 25%, while that of Etihad Airways will fall to 12% from 24%.

Jet Airways has been struggling with cash flows for the past six months due to rising fuel costs and intense competition. It has delayed payments to lessors, airport operators, oil marketing companies and a part of its staff to keep the airline flying.

Also read: Opinion | The Jet Airways bailout won’t be able to solve anything

Jet Airways had a gross debt of 8,411 crore as of September-end, including aircraft debt of 1,851 crore.

The bailout plan led by banks and approved by the board of Jet Airways on 14 February proposes restructuring under RBI 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.

Also read: Jet Airways may raise 4,000 crore via rights issue if Etihad open offer fails

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