Jet Airways is yet to announce the outcome of the extraordinary general meeting (EGM) held on Thursday, but minority shareholders are already raising questions on the company’s proposal to allow lenders to take control of the debt-laden airline.

“Pumping in public money into a debt-laden airline may be risky,” said a minority shareholder, who was present at the EGM. Questions on who will lead the airline also went unaddressed at the meeting.

On Thursday, the debt-laden airline called for an extraordinary general meeting to seek approval to allow lenders to convert debt into equity.

According to a source, the meeting that lasted for 45 minutes, was not attended by the Chairman and Promoter of Jet Airways, Naresh Goyal. Gurang Shetty, whole-time director, and Amit Aggarwal, Deputy CEO, addressed the shareholders.

Arvind Gupta, activist and minority shareholder of Jet Airways, also raised concerns over the proposal. "The mood of the meeting was neutral and not many people were present from the side of the company. Minority shareholders questioned SBI’s need to invest public money in the airline. This move will end up hurting minority shareholders. We questioned if SBI becomes the majority shareholder, who will run the company. Questions on the proposal for an exemption for open offer were also raised. How will minority shareholders exit, will Etihad become a dominant shareholder?"

The airline has loans of over Rs 8,400 crore, with SBI being its biggest lender. SBI’s exposure is said to be close to Rs 2,000 crore. The lenders also have the opportunity to appoint one or more persons as nominee directors or observers on the board of the company.

Jet is also seeking approval to raise further loans within the overall existing borrowing limit of Rs 25,000 crore, and provide the lenders with the right to convert such loans into shares of the company. Sources indicated that despite the questions raised by the minority shareholders, the proposals may have got the majority shareholder’s approval.

BusinessLine had reported that after months of negotiations, lenders along with SBI were set to take control of debt-laden Jet Airways, with the company board approving a bank-led Provisional Resolution Plan. Under this plan, lenders, led by SBI, will convert debt into 11.4 crore shares for just Re 1. This would result in the lenders becoming the largest shareholders in the company, with about 50 per cent stake.

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