Jet Airways has approved a rescue plan that might help bring the beleaguered airline back from the brink. As per the plan, the lenders, led by State Bank of India (SBI), will get a majority stake in Jet Airways through conversion of debt into equity, and the airline will meet a funding gap of about ₹8,500 crore ($1.2 billion) that it needs to stay afloat.

Following months of uncertainty over Jet’s future and piling debts, the plan, if approved, can save the airline from impending doom, especially at a time when a majority of Indian airlines are facing the brunt of high oil prices and a weak rupee.

The proposed Bank-Led Provisional Resolution Plan (BLPRP) will be a mix of equity infusion, debt restructuring, sale or lease back, or refinancing of aircraft, among other things, the Mumbai-based airline said in a statement. The plan will also let the lenders nominate members to the board.

As per the resolution plan, the lenders’ debt will be converted into 114 million shares valued at ₹1 “since under the RBI Circular, lenders can convert debt into equity at ₹1 when the book value per share of a company is negative,” the company said.

The plan is subject to shareholders’ approval which the company expects to get at a meeting scheduled next Thursday. The plan will also be presented to the consortium of lenders, the overseeing committee of the Indian Bankers' Association, the Etihad Airways board, and founder Naresh Goyal for approval.

“Jet Airways continues to make steady progress on its operational and financial turnaround and with today’s approval of the Bank-led Provisional Resolution Plan by the Board of Directors of the Company, we remain confident of delivering a more strategic, efficient and financially viable airline,” Vinay Dube, CEO, Jet Airways, said.

Meanwhile, the company reported a fourth consecutive quarterly loss. For the quarter ended December 31, the company posted a loss of ₹732 crores, compared with a net profit of ₹186 crores in the same period last year. Total revenue during the quarter came in at ₹6,411 crore compared to ₹6,412 crore last year, it said in an exchange filing.

“Despite improvement in RASK which grew by 2.6% over Q3 FY18 due to seasonal, demand-led strengthening of fares, higher costs due to the price of Brent crude (up 29% YoY) and the depreciated Indian Rupee impacted the airline’s overall business performance,” Jet said.

The company also said that it incurred a loss of “₹3,208 crores during the nine months ended 31 December 2018 and current liabilities exceeds its current assets by ₹9,610 crores”.

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