Kingfisher thirsts for cash injection from Diageo deal
Cash-starved Kingfisher Airlines (KFA) will seek to leverage the cash inflow into promoter group companies from the Diageo deal to seek some relief from its bankers and the Directorate General of Civil Aviation, sources told FE, even as a consortium of lenders to KFA is tipped to meet this week to take stock of their R8,000-crore plus exposure to the airline.
Diageo announced on Friday that it will purchase 53.4% stake in United Spirits for around R11,000 crore. The deal, after obtaining regulatory approvals, will see nearly R2,400 crore going into the United Breweries (Holdings) (UBHL) balance sheet, giving flexibility to the group’s holding company to invest in its companies.
“The cash, which will come into the promoter companies, opens up a lot of opportunities for us and we are exploring them as we frame our revival plan and get ready to negotiate with our bankers and later the DGCA,” said a person in direct knowledge of the development. “But please remember that no cash from the Diageo deal will come into KFA before the next two months.”
“However, it is too early to comment that KFA will get the cash,” the person added. “All I can say is that amongst all the group companies, the airline needs it the most.”
UBHL, which holds 24.44% shares in KFA, already has a R2,109-crore equity investment in the airline. The holding company has also given loans of R2,130.79 crore to the
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