Jet Airways accepts Etihad’s bailout plan

Naresh Goyal-controlled Jet Airways has agreed with most of the conditions set by its partner Etihad for offering a lifeline to the debt-laden domestic carrier, according to a report in Business Standard.

The airlines are set to sign a memorandum of understanding (MoU) within days, according to sources.

As per the proposed deal, Founder Chairman Goyal will step down from the board of directors and relinquish his decision-making powers.

His stake in the company would come down to around 22% from the existing 51% currently. Goyal's son Nivaan Goyal will get a board seat, the report said.

With this deal, Etihad's stake will go up to 40% from the present 24%. The deal is likely to be finalised at the Jet Airways board meeting on February 14, which will be followed by an extraordinary general meeting on February 21. Subsequently, a consortium of lenders led by State Bank of India would convert their debt into equity and are likely to hold about 30% in the airline. The remaining stake will remain with the public.

It is reported that Jet has agreed with the Gulf carrier's condition of investing in the domestic airline at Rs 150 per share, much lower than Jet's current market price of Rs 266.50.

Etihad is willing to immediately release $35 million if its conditions are met. While some believe the riders are unrealistic, the airline's bailout has become a national issue with more than 20,000 jobs at stake.