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Minority shareholders have raised concerns over Etihad Airways’ absence at the EGM of Jet Airways on Friday.
Arvind Gupta, whistle-blower activist and minority shareholder of Jet Airways, who was present at the meeting, said, “I had raised questions on Etihad Airways, Jet Airways and the future of the SBI. However, the board’s representatives said questions about Etihad and SBI were irrelevant to fit the EGM.”
According to one source, Etihad Airways did not even cast its vote as the airline needed clarity on investment plans.
Etihad and Jet Airways did not respond to emails from BusinessLine .
At the EGM, the Naresh Goyal-led Jet Airways managed to get votes of 98 per cent of shareholders. The proposals included allowing lenders to convert debt to equity.
Loan book
According to sources, no member from Etihad Airways was present at the EGM. The Abu Dhabi-based airline owns 24 per cent in Jet and could see its stake go down to 12 per cent if lenders convert the debt to equity.
Currently, the airline has loans of over ₹8,400 crore, with SBI being its biggest lender. SBI’s exposure is said to be close to ₹2,000 crore. Jet Airways had proposed to increase the authorised share capital of the company from ₹200 crore to ₹2,200 crore, a move aimed at issuing fresh shares to the lenders.
“Etihad has been taken for a ride and they would be happy to acquire the company. The small shareholders have been cheated,” said Gupta.
“If the SBI takes Jet Airways to NCLT for debt resolution, I will be happy,” he said. A bank cannot invest in a company, it’s people’s money after all, he said. “What appears is that SBI is trying to revive the company. It’s good politics but bad economics. They are avoiding the open offer to the shareholders which is against the interest of small shareholders,” Gupta added.
According to Dhiraj Mathur, Partner and Leader, National Aerospace and Defence Practice at PWC, “Jet Airways should be revived, the promoters need to infuse additional capital and lenders should restructure the debt because it is one of the largest airlines in India and its continuation is important for the growth of the industry.”
Another analyst who refused to be quoted said, “This is the final option for SBI. If this case goes to NCLT, the existing promoter along with Etihad Airways will both be out. Then they will have to sell the existing assets like the aircraft and JPPL programme. Then other investors will have to bid and whoever bids highest gets the stake in the airline after clearing off the existing debt.”
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