Jet Airways India Ltd is seeking the approval of shareholders to convert loans into equity as the ailing carrier saddled with $1.1 billion (Dh4 billion) of debt negotiates a rescue deal with its lenders and partner Etihad Airways PJSC.

India’s biggest full-service carrier has called an extraordinary general meeting on February 21 in Mumbai, during which it will also seek consent for lenders to appoint company directors and boost its capital, according to a filing on Monday. The airline, 24 per cent owned by Etihad, didn’t say whether the three sides have reached an agreement over the terms of the rescue.

Jet Airways, Etihad and lenders have been in talks for weeks to work out a revival plan, although no commonly agreed proposal was presented to the government, a ministry official said January 25 in New Delhi. The Mumbai-based carrier has struggled with low fares in an increasingly competitive market, losing money in all but two of the past 11 years.

Lenders led by State Bank of India, the country’s biggest lender by assets, have sought Rs35 billion (Dh1.8 billion) of investment from founder Naresh Goyal and Etihad before they can revamp its debt, people with knowledge of the matter said earlier this month. Jet Airways said on January 16 it was considering “various options on the debt-equity mix.”

Shares of the airline fell 3.3 per cent to 244.80 rupees in Mumbai, their lowest level in more than two weeks. They have dropped 67 per cent in the past 12 months.