Jet Airways will seek shareholder approval to convert existing debt into equity as it explores ways to get out of a financial crunch.

The full service airline will seek a green light from shareholders to convert part or all of its loans into equity at an extra-ordinary general meeting on February 21, subject to regulatory approval.

It will also seek permission to convert future loans into equity, Jet Airways said in a regulatory filing on Monday.

The airline owes little over Rs 8,000 crore to a consortium of lenders led by the State Bank of India.

The shareholder meeting has been called at a time Etihad, which holds a 24 per cent stake in the carrier, has set tough terms to infuse more funds.

Countering the Etihad move, Jet founder Naresh Goyal has said he is willing to invest up to Rs 700 crore but has set the condition that his stake in the airline should not fall below 25 per cent.

In the EGM notice, Jet Airways has said that as part of its turnaround plan, it is considering various funding options “including conversion of loans into shares or other securities’’.

It is, therefore, planning to increase the authorised share capital from Rs 200 crore — consisting of 18 crore equity shares (of Rs 10) and two crore preference shares each — to Rs 2,200 crore. This will consist of 68 crore shares and 152 crore preference shares.

This increase in the authorised share capital will require a consequential amendment to the memorandum and articles of association (AoA), which calls for the approval of the shareholders by means of special resolutions, the airline added.