According to sources shareholders of the beleaguered Jet Airways have approved a proposal to convert a part of company's loans into shares with an overwhelming majority. Meanwhile the development assumes significance as the approval was required to go ahead with the Bank led Provisional Resolution Plan (BLPRP).
Furthermore as part of this, public sector lenders will become the largest equity owners of the airline, virtually making it a nationalized carrier. Reportedly the proposal, an attempt to relieve the financial strain on the passenger carrier, was put forth to the shareholders at the Extraordinary General Meeting. Further results of the vote were announced on late Friday night and the special resolution to allow conversion of loans into "shares or convertible instruments or other securities" was passed with over 97% votes and it comes after Jet Airways Board approved the BLPRP on February 14.
The company said in a regulatory filing to the BSE on February 14"The BLPRP currently estimates a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale or sale and leaseback or refinancing of aircraft, among other things".
