Jet Airways shareholders will vote at a specially convened meeting on February 21 on its proposal to issue new equity and preference shares and convert a part of existing debt into equity. The beleaguered airline will also ask shareholders to allow its lenders to nominate directors to its board.
In a communication to the stock exchanges on Monday, Jet said it has proposed to increase share capital 11-fold to Rs 2,200 crore from Rs 200 crore, by creating an additional 50 crore shares and 150 crore preference shares.
Jet is laden with a debt of about Rs 8,052 crore ($1.14 billion) as of September 30 and the airline is running out of options as it tries to strike a respectable deal that satisfies not just the lenders, but also its minority partner Etihad Airways.
“This is precursor to a deal,” said Girish Vanvari, founder, Transaction Square, a corporate consultancy firm, referring to the proposals.
The proposals also include an authorisation to the Jet board to negotiate and “issue and allot” shares and convertible instruments against conversion of loans into shares, convertible instruments and other securities. The resolutions proposed also empower lenders to nominate one or more directors on the Jet board, which is a new clause the airline wants to incorporate in its articles of association.
According to Vanvari, the Jet communique to stock exchanges means that a deal with Etihad is on the cards. Others agree. “You need an airline to run another airline,” an airline official said on conditions of anonymity.
29/01/19 Economic Times
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In a communication to the stock exchanges on Monday, Jet said it has proposed to increase share capital 11-fold to Rs 2,200 crore from Rs 200 crore, by creating an additional 50 crore shares and 150 crore preference shares.
Jet is laden with a debt of about Rs 8,052 crore ($1.14 billion) as of September 30 and the airline is running out of options as it tries to strike a respectable deal that satisfies not just the lenders, but also its minority partner Etihad Airways.
“This is precursor to a deal,” said Girish Vanvari, founder, Transaction Square, a corporate consultancy firm, referring to the proposals.
The proposals also include an authorisation to the Jet board to negotiate and “issue and allot” shares and convertible instruments against conversion of loans into shares, convertible instruments and other securities. The resolutions proposed also empower lenders to nominate one or more directors on the Jet board, which is a new clause the airline wants to incorporate in its articles of association.
According to Vanvari, the Jet communique to stock exchanges means that a deal with Etihad is on the cards. Others agree. “You need an airline to run another airline,” an airline official said on conditions of anonymity.
29/01/19 Economic Times
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