A group of lenders led by the State Bank of India will become the majority stakeholders in Jet Airways in return for a US$1.2 billion rescue package.
If approved by shareholders, the deal is expected to allow Jet Airways, India’s second-largest airline, to continue flying.
The airline has been forced to cancel flights after several aircraft were grounded and leasing companies were reportedly poised to repossess aircraft, The Times of India reported.
Jet Airways last week reported its fourth consecutive quarter of losses.
The rescue plan, converting Jet Airway’s debt into equity, will be presented to shareholders for approval at a meeting on February 21.
Under the pending deal, the consortium of banks and the Indian government’s National Investment and Infrastructure Fund will own 51% of the airline; Etihad, which currently has a 24% stake in Jet, will go to 24.9%, while Jet founder Naresh Goyal’s share will fall from 51% to 20%.