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Vijay Mallya on Tuesday said that the United Breweries Group is in talks with a foreign investor in his bid to revive Kingfisher Airlines Ltd and a decision in that regard is expected in about 90 days. Vijay Mallya also said that Kingfisher Airlines is ready to pay one month’s salary to the now grounded airline’s employees on “humanitarian grounds”.
Vijay Mallya, who was speaking here after the company’s annual general meeting said, “I am not at liberty to divulge further details as there are strict confidentiality clauses. Media will speculate on it and the investor is very sensitive to the identity being revealed. Let’s really give it a good try to get Kingfisher Airlines restarted.”
“I have told the shareholders that this will take some shape in one way or other in 90 days. It (duration) could be longer or shorter,” said Vijay Mallya.
Vijay Mallya said that Kingfisher Airlines has submitted multiple revival plans with the Directorate General of Civil Aviation (DGCA) but he has not heard back from the authority. “However, we gather informally that they would like a full recapitalisation. In our current discussions with a potential investor, we are focussing on these things,” he added.
The carrier, grounded since October 2012, has not returned a profit from 2005 when it started operations and had run up accumulated losses of Rs 16,023 crore as on March 2013. Apart from its equity investment of Rs 2,095 crore in the airline, UBHL’s exposure includes loans and advances of Rs 2,359 crore besides corporate guarantees. The airline also has pending dues with aircraft lessors, airport authorities, tax authorities and on fuel bills with oil marketing companies.
In another development, Kingfisher Airlines board has requested UBHL board to continue funding the carrier. “United Breweries (Holdings) Ltd has accepted this in light of the prospective investor. UBHL cannot use the funds it has currently for this purpose, because of the restraining order from the Karnataka High Court. We have in fact replied to the court asking for permission to use the funds and now it is in the hands of