Shares of Jet Airways fell over two per cent in the afternoon trade on Tuesday amid the crisis-hit airline deciding to seek shareholders' approval for conversion of loans into shares. The full-service carrier, which is looking to raise funds to tide over financial woes, would hold a meeting of the shareholders on February 21 and has sought nod from them for various proposals.
Shares of Jet Airways dropped 2.36 per cent to Rs 239.60 apiece in the afternoon trade on the BSE.
After opening at Rs 245.50, the scrip touched a high of Rs 251.35 before shedding the gains.
The airline would seek shareholders' approval for conversion loan into shares or convertible instruments or other securities, according to a regulatory filing made on Monday.
The extraordinary general meeting of the shareholders is to be held on February 21.
The airline would seek nod to "convert the whole or part of the outstanding under loans, extended / to be extended by the lenders, into shares, or convertible instruments or other securities, of the company...", according to the notice of the meeting submitted to the stock exchanges.
The conversion would be done as per the terms contained in the respective loan documents between the company and its lenders. It would also be subject to all requisite regulatory approvals.
Besides, Jet Airways would seek shareholders' approval to negotiate and finalise the terms and conditions with the lenders for raising further loans from time to time as well as provide the lenders with a right to convert such loans into shares, or convertible instruments or other securities.
Further, loans would be within the overall existing borrowing limit of Rs 25,000 crore.
Among others, the airline has decided to increase its authorised share capital to Rs 2,200 crore from Rs 200 crore, according to the notice.
Approval from the shareholders has also been sought for alteration in the company's Articles of Association to provide rights for lenders to appoint people as nominee directors or as observers on the board.