Jet Airways accepts Etihad’s terms

NEW DELHI, Feb 03 (Reuters): Jet Airways Ltd 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 per cent recently.

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 per cent from

51 per cent and stepping down from the board, the report said, citing sources.

Etihad's stake would go up to 40 per cent from 24 per cent and the lenders would convert some of their debt to equity, giving them about 30 per cent ownership of the cash-strapped carrier, the newspaper reported.

Jet Airways did not immediately provide a comment while Etihad was not immediately reachable outside business hours.

Saddled with debt of about $1.14 billion, Jet Airways has been hit by fierce competition, rupee depreciation and high oil prices. The airline, which controls a sixth of India's booming aviation market, owes money to banks, vendors and lessors - some of whom are considering taking back aircraft, sources have told Reuters.

Jet Airways is also behind on salary payments to pilots. The airline had agreed to pay the outstanding 25 per cent of salary for October and 75 per cent of November in January, while the remaining will be cleared in tranches by April.