The shareholders of the company, who met here on Monday, have given their green signal to the management's proposal for the equity rejig. The post- rights issue share capital of the company will go up by Rs 110 crore to Rs 200 crore from the current level of Rs 90 crore, top officials of the company said here.

The extraordinary general body meeting (EGM) of the shareholders held here has endorsed the financial recast plan proposed by the management to put the yet-to-take-off airport company on sound financial skies.

Kerala government is the single largest stake-holder in CIAL, with an equity stake of 51 per cent, followed by Air India which holds 10 per cent, State Bank of Travancore and the Federal Bank Ltd. Around 25 per cent of the equity is with financial institutions and the public.

Under the new package, the state government will have to pump in an additional Rs 62 crore to subscribe to its part of the equity. Earlier, the state's share was Rs 49 crore in the Rs 90 crore equity part of which it has yet to bring in Rs 14 crore.

Air India, State Bank of Travancore and the Federal Bank will subscribe to Rs 25 crore worth of shares, while the remaining will be earmarked for the financial institutions and the public. The total project cost of the company was Rs 240 crore.

CIAL will use the additional equity to retire some of its immediate outstanding debt, especially to Hudco, and also to meet its working capital requirements. CIAL had earlier renegotiated its Rs 141 crore outstanding with Hudco and managed to roll-over the debt till 2005. Hudco also agreed to slash the interest rate on its loan from 16.5 per cent to 14 per cent.The financial recast plan for CIAL was prepared by the international consultants, Pricewaterhouse Coopers early this year and was approved by the CIAl director board in June.

Topping the recast agenda was the need to raise CIAL's equity capital from Rs 90 crore to Rs 200 crore. Though, the consultants had suggested various ways including divesting of state government's stake to enhance the financial flow of the cash-strapped company, the director board has opted for the rights issue route to raise the money. Other proposals in the financial package include a debt-equity swap with Hudco, development of 100 acres of land owned by the airport by Hudco for commercial purposes etc.