Cash-strapped Jet Airways may have finally been thrown a lifeline, but founder and promoter Naresh Goyal may lose control of the airline he set up in 1982. The Jet Airways board has approved a proposal put forward by a consortium of banks, led by State Bank of India, to allow it to become the largest shareholder by converting a portion of the banks’ debt into equity.

Shares of Jet Airways rallied 7.5% on Friday morning after this development. Stock exchanges were notified of the resolution plan after the end of trading on Thursday.

While there is not much clarity about how the deal will be structured, Goyal is expected to lose control of the airline and his stake could drop to 20% from the current 51%. Etihad Airways – along with a partner – may eventually become the biggest shareholder, Economic Times reports.

The draft plan put forward by the lenders estimates a funding gap of 85 billion rupees (US$1.19 billion), which would be met through equity infusion, debt restructuring, and sale and lease-back of planes.

The debt-to-equity conversion could be the first stage, while the second could be Etihad, possibly along with a local partner, subscribing to fresh shares issued by Jet to increase its stake, the daily said.

The plan, however, needs approval from the Securities and Exchange Board of India and the Ministry of Civil Aviation before it can be implemented.

The airline, meanwhile, reported its fourth consecutive quarterly loss at 5.88 billion rupees during the October-December quarter due to higher fuel costs and a fall in other income.

Jet Airways’ domestic market share fell to the lowest point in at least five years, 12.7%, in the quarter. While the industry’s domestic capacity grew by 18% year on year during the quarter, Jet reported modest growth of 1.5% because of its ongoing financial crisis.