The majority of shareholders of Jet Airways have given approval to let lenders take control of the company by converting their debt to equity. According to data shared by the company, nearly 98 per cent of the shareholders who voted at the EGM on Thursday voted in favour of the proposal.

Jet said in a filing to the stock exchanges on Friday shareholders have approved five proposals that were put up for voting at the EGM.

Small investors worried

However, sources said minority shareholders raised questions on lenders taking control of the debt-laden airline.

“Pumping in public money into a debt-laden airline may be risky,” said a minority shareholder, who was present at the EGM. Questions on who will lead the airline also went unaddressed at the meeting.

 

The meeting that lasted 45 minutes was not attended by Jet promoter and Chairman Naresh Goyal, said a source. Gurang Shetty, whole-time director, and Amit Aggarwal, Deputy CEO, addressed the shareholders.

Arvind Gupta, activist and minority shareholder of Jet Airways, also raised concerns over the proposal.

“The mood of the meeting was neutral and not many people were present from the side of the company. Minority shareholders questioned SBI’s need to invest public money in the airline. This move will end up hurting minority shareholders. We questioned, if SBI becomes the majority shareholder, who will run the company? Questions on the proposal for an exemption for open offer were also raised. How will minority shareholders exit? Will Etihad become a dominant shareholder?” Gupta said.

The airline has loans of over ₹8,400 crore, with SBI being its biggest lender with an estimated exposure of ₹2,000 crore. The lenders also have the opportunity to appoint one or more persons as nominee directors or observers on the board of the company.

BusinessLine had reported that after months of negotiations, lenders led by SBI were set to take control of debt-laden Jet Airways.

Further loans

Jet is also seeking approval to raise further loans within the overall existing borrowing limit of ₹25,000 crore, and provide the lenders with the right to convert such loans into shares. Sources indicated that despite the questions raised by the minority shareholders, the proposals may have got the majority shareholders’ approval.

 

PTI reports: A consortium of banks is considering an interim funding of ₹500 crore for Jet but a final decision is yet to be taken, PNB Managing Director Sunil Mehta said on Friday. PNB is part of the SBI-led lenders’ consortium that has extended loans to the airline.

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