The reformatted Jet Airways will account for 51 per cent government fund and Public Sector Undertakings (PSU) banks- owned. The SBI- led lenders is likely to convert ₹600 crore loan into equity at ₹1. This will lead their stake to 32 per cent. The National Investment and Infrastructure Fund (NIIF) will take up 19.5 per cent and will invest ₹1,400 crore.
Collectively, this will mean 51.5% control with PSU banks and NIIF.
It is learnt Abu Dhabi-based Etihad, which currently has 24% stake in Jet, will invest another Rs 1400 crore, limiting its stake at 24.9% and avoiding an open offer. Etihad is expected to pick up the additional equity at Rs 150 per share. Incidentally, the Abu Dhabi Investment Authority is one of the investors in NIIF, which was set up for building infrastructure but is now bailing out the airline. Jet’s remaining debt of Rs 6,000 crore will be restructured and converted into long term 10-year debt.
After this restructuring, Naresh Goyal’s stake will fall from 51% to 20%. While he will remain promoter, Goyal will lose board seat and managerial control.
(Comments from Jet were sought and awaited at the time of filing this story.)
The Jet board had last Thursday cleared a “bank-led provisional resolution plan” (BLPRP) which will see SBI-led lender banks becoming its largest stakeholder after debt restructuring. Under this plan, Jet will see restructuring to meet a funding gap of nearly Rs 8,500 crore, including proposed repayment of Rs 1,700-crore aircraft debt, through steps like conversion of debt to equity, equity infusion and asset monetisation.
Lenders have proposed to convert debt to equity at Re 1 and provide emergency funding. Conversion of lenders’ debt into 11.4 crore shares of Rs 10 each by allotment of such number of equity shares to the lenders would result in the lenders becoming the largest shareholders in the company.