Jet Airways seeks shareholder approval for converting debt into shares

The airline will also seek approval for their lenders to appoint a nominee director to the board

Jet Airways said on Monday it would seek shareholder approval to issue new equity and convert existing debt into equity among other things at a special meeting on Feb. 21, as the beleaguered airline attempts to stay afloat.

The company will also seek approval to allow its lenders to nominate directors to its board, the airline said in a regulatory filing.

Saddled with a debt of about 80.52 billion rupees ($1.14 billion) as of Sept. 30, Jet is desperately searching for a deal that could help mitigate its severe liquidity crunch.

At the extraordinary shareholder meeting, the company proposes that share capital be increased 11-fold to 22 billion rupees from 2 billion rupees, by creating an additional 500 million shares and 1.50 billion preference shares.

The latest development comes after Jet on Jan. 17 said a plan involving a cash injection by stakeholders and board changes were in the pipeline.

Jet, India's biggest full-service carrier by market share, owes money to pilots, lessors, banks and vendors. Its problems have been exacerbated by higher oil prices and intense pricing competition in the domestic market.