The board of Jet Airways (9W, Mumbai Int'l) has approved a restructuring plan wherein a consortium of lenders led by the State Bank of India (SBI) will take a 32% stake in the airline through a debt-for-equity transaction, The Times of India has reported.

The lenders will convert a INR6 billion rupee (USD84 million) loan into equity under the so-called bank-led provisional resolution plan (BLPRP).

The National Investment and Infrastructure Fund (NIIF) will inject a further INR14 billion rupees (USD196 million) and take a 19.5% stake in the carrier. The NIIF is funded by external investors, including the Abu Dhabi Investment Authority but with Indian government guarantees.

The consortium led by the state-owned SBI and the government-backed fund together will thus together own 51.5% of the shares in the airline.

Etihad Airways, which currently controls a 24% stake, will invest another INR14 billion rupees (USD196 million) but will only increase its stake to 24.9%. As a result, it will stay below the threshold of a 25% stake. If it exceeded the threshold, it would have to make an open offer to all remaining shareholders. The Securities and Exchange Board of India (SEBI) previously rejected Etihad's request to waive the open offer requirement.

Following the readjustment, Naresh Goyal, the airline's founder, Chairman, CEO, and current 51% owner, will lose his executive positions. His stake will drop to 20%. The ousting of Goyal from effective control over Jet Airways was one of Etihad Airways' key conditions for investment.

The entire BLPRP is addressing the almost INR85 billion rupee (USD1.2 billion) funding gap faced by the airline.

The airline's shareholders will vote on the plan during a meeting on February 21, 2019.

Meanwhile, the Economic Times has reported that the Directorate General of Civil Aviation (DGCA) is reviewing Jet Airways' schedule every fifteen days to check whether it is viable given the airline's fleet and financial situation.