Jet Airways has agreed to Etihad's bailout terms, says report, boosting shares

Jet Airways has agreed to most conditions set by shareholder Etihad Airways for offering a lifeline to the debt-laden Indian carrier, the Business Standard newspaper said, sending Jet’s shares soaring as much as 18% on Friday. Both airlines are set to sign a memorandum of understanding (MoU) within days, which would result in Jet Airways’ founder and chairman Naresh Goyal reducing his stake to 22% from 51% and stepping down from the board, the report said, citing sources. Etihad’s stake would go up to 40% from 24% and the lenders would convert some of their debt to equity, giving them about 30% ownership of the cash-strapped carrier, the newspaper reported. Jet Airways said in a statement to the stock exchange that, as previously stated, the airline is working on a comprehensive resolution plan with lenders, lead by State Bank of India (SBI), and other stakeholders. Etihad declined to comment. Jet said on Monday it would seek shareholder approval next month to convert existing debt into equity and allow its lenders to nominate directors to its board, in an effort to resolve its financial issues. SBI chairman Rajnish Kumar said Friday that efforts are on to resolve Jet’s situation but declined to comment on how much stake the bank would end up taking if the debt for equity swap is approved.<br/>