The restructured Jet Airways will effectively be 51% government fund and PSU banks-owned. Sources say SBI-led lenders will convert a Rs.600 crore loan into equity at Re.1, which will take their stake to 32%. National Investment and Infrastructure Fund, an investor-owned fund manager anchored by the government of India, will pick up 19.5% and invest Rs.1,400 crore, they add. 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.1,400 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 to 20% from 51%. While he will remain promoter, Goyal will lose the 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” , which will see the 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.
It is learnt Abu Dhabi-based Etihad, which currently has 24% stake in Jet, will invest another Rs.1,400 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 to 20% from 51%. While he will remain promoter, Goyal will lose the 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” , which will see the 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.
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