Kingfisher Airlines bailed out by banks

Written by fe Bureau | Mumbai | Updated: Apr 7 2011, 09:11am hrs
In a bail out of sorts for the beleaguered Kingfisher Airlines, a consortium of 13 lenders has converted a part of their loans into equity and now hold a 23.37% stake in the loss-making company.

Kingfisher owes banks a whopping R7,651 crore and after the debt recast, the combined shareholding of Kingfishers founders has fallen to 58.61% from 66.28%, agencies said, quoting Ravi Nedungadi, UB Groups chief financial officer. State Bank of India now holds 5.678% in the company.

In the three months to December 2010, Kingfisher reported a loss of Rs 254 crore and total losses in the nine months of 2010-11 are of the order of Rs 672 crore. The companys equity capital at the end of December 2010 was Rs 266 crore. The airline had piled up losses of Rs 1,647 crore in 2009-10.

United Breweries (Holding) , Kingfisher Finvest India, UB Overseas and UB Group Chairman Vijay Mallya are the founders of Indias second-biggest airline by market share.

The debt recast included issuance of fresh shares to founders and lenders. Kingfisher Airlines shares were up 4.57% to close at Rs 48.05 on the BSE on Wednesday.

In January, Kingfisher Airlines said its board alloted preferential shares to a consortium of lenders, besides promoter group firms United Breweries and Kingfisher Finvest India under a scheme to recast its debt.