Lenders meeting with troubled Indian carrier Jet Airways on Wednesday concluded unsuccessful as consortium could not agree to Eithad’s proposal.
A five hour meeting led by State Bank of India, to consider a rescue proposal by Etihad Airways in which Etihad would inject about $35 million and become the majority shareholder, on condition that founder Naresh Goyal steps down as chairman.
Etihad offered to buy new shares in Jet Airways at a steep discount of 150 rupees each, in addition to the capital injection, against Wednesday’s midday price of 271 rupees. The share option offer deal could bring down the founder Goyal’s ownership of the airline from 51% to just over 20%, and loose his grip as a Chairman.
If the offer was accepted, then Etihad could end up with more than 45% stake in Jet Airways. according to local media, which could trigger regulations requiring a full offer.
However, capital injection of $35 million will give only a breathing space for the airline, which has 30 billion rupees ($425 million) in debt maturing by March 2019.
The airline’s overall debt totals 84.1 billion rupees, of which nearly 60% is dollar denominated.
In the meantime, Etihad has been posting losses over the past two years, and reported a colossal $1.52 billion annual loss last year.