Diageo deal not yet plus for Kingfisher
The Diageo deal could bring nearly Rs 2,400 crore to the balance sheet of United Breweries Holding Ltd (UBHL), but it is unlikely to impact the revival plan for the group’s cash-starved Kingfisher Airlines, sources said.
“The board of UBHL will decide what to do with the cash that will come in and it does seem likely they will put it into Kingfisher Airlines as we need it the most,” said a person in direct knowledge of the development. “But the money will only come in after regulatory approvals, which may take a couple of months.”
The airline, with a debt of R8,030 crore, has been asked by bankers to raise R5,400 crore by November 30. Its licence, which is now under suspension, expires by December 31. The airline must submit a detailed revival plan highlighting its financial stability to resume operations.
“We will approach bankers and the DGCA with a revival plan. The fact that promoter companies are getting a significant cash inflow will be highlighted,” said the person quoted above.
“But obviously, till the transaction is completed, we cannot say that we have got equity infusion from UBHL,” said the person.
United Spirits will reduce its debt with the Rs 3,300 crore it gets from the deal. Apart from Kingfisher, United Spirits has one of the highest debt among UB Group companies. USL has a debt of Rs 8,443.57 crore as of March 2012, UBHL Rs 3,478.51 crore, Mangalore Chemicals and Fertilizers Rs 1,323.55 crore and United Breweries Ltd Rs 876.88 crore.
In anticipation
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