Stake sale talks in preliminary stage, says KFA

Written by fe Bureau | Mumbai | Updated: Sep 29 2012, 09:31am hrs
Cash-strapped Kingfisher Airlines on Friday said that talks with foreign carriers for a stake sale is at preliminary stages.

The airlines statement came after the National Stock Exchange sought a clarification from the airline on media reports about a stake sale to foreign airlines which resulted in Kingfishers share price on the NSE jumping up by 17% to R16.95 from R14.40 on September 24.

The company is in talks with foreign carriers as well as domestic investors to sell a stake, pertains to a statement of a very general nature, which in our view can hardly be classified as price sensitive nature given that these talks are self-evidently at preliminary stages, Kingfisher told the NSE.

In any case, the fact that the company has been attempting to raise much needed capital over the last two years pursuant to shareholder resolutions approving the same have been widely reported in the media for a long time.

We would like to clarify that even this general non-price sensitive information was shared with the shareholders only as a response to the queries raised by various shareholders regarding equity investmen, the statement added.

In a separate clarification to the Bombay Stock Exchange, the airline said that the letter from the exchange did not elicit clarification as the queries pertained to shareholder allegations.

Meanwhile, sources in the airline said that Kingfishers stake sale talks with foreign carriers will face problems as the promoter group will not be using the money raised from stake sale in group company United Spirits to pare down the airlines debt.

It is very difficult to use the money from the United Spirits stake sale, the person in the know of the development added.