The stock has soared on news of RBI allowing domestic banks to restructure aviation sector debt.

Kingfisher Airlines (KFA) has seen renewed investor interest, with the Reserve Bank of India’s approval seen favourable for the company’s impending global depository receipt (GDR) and domestic issues. KFA plans to raise $250 million (about Rs 1,100 crore) through GDRs and Rs 500 crore through a domestic issue in the next couple of months.

Also Read   Related Stories News Now - Kingfisher to convert up to a third of debt into equity - Kingfisher Airlines may cut jobs: Mallya - Kingfisher to launch $250 million GDR issue - SpiceJet ex-CEO may join KFA - Texmaco board meet on Oct 4 to mull raising $30 mn - Aban gets nod to raise $400 mn

Also Read   Related Stories News Now - Markets end on a strong note - Nabard FY14 operating surplus soars 28% to Rs 1,635 cr - RBI eases banks' term deposit restrictions - NMDC Q4 net down 21.74% to Rs 1,642.28 cr - Balrampur Chini Q4 profit up by 15% More

Reports suggest KFA is seeking a two-year moratorium on the interest payment on its debt, which it hopes to repay over the next seven to nine years. With total debt of about Rs 7,922 crore and interest cost of nearly Rs 1,100 crore against a net loss of Rs 1,290 crore, the company had an interest coverage ratio of -0.84 per cent as of March.

Operationally, the year 2010 has spelt a strong revival of the aviation sector. KFA’s operating income increased 29 per cent year-on-year (y-o-y) to Rs 1,641 crore in the first quarter of the current financial year. Interest costs rose 50 per cent y-o-y to Rs 321 crore, but the company managed to contain losses at Rs 186 crore, 20 per cent lower than the year-ago period. Successful capital raising will help reduce interest cost, and will consequently cut losses.

The stock has soared over eight per cent in the last two trading sessions to Rs 74.1. It has not seen any significant rerating by analysts so far. It will depend on how the debt restructuring plan shapes up over the next month and the amount of capital the company attracts from overseas and Indian markets.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end on a strong note - Nabard FY14 operating surplus soars 28% to Rs 1,635 cr - RBI eases banks' term deposit restrictions - NMDC Q4 net down 21.74% to Rs 1,642.28 cr - Balrampur Chini Q4 profit up by 15%

Tags : Kingfisher Airlines | GDR | RBI | United Breweries |   Read Business news in  Advertisements -  Journey on, We are by Your Side. Click here to know more -  Help a Child Achieve her. Click to know more -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  The Best Seller is Also the No. 1 in Mileage. Click here -  Watch The Film Here. Click here to know more.. -  Leader in Passenger Car & Automobile Tyres. Click here -  1 billion in saving for Unilever without any tangles. -  A Brand New Server at a Price That Fits Your Budget. Click here -  Learn How One City is Running on FOOD SCRAPS. -  One Partnership Endless Possibilities. Click here to know more -  Helping doctors detect diseases earlier, saving costs & extending lives. -  36 Lakhs can get you a pool of Luxuries. Click here -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More -  Invest in Real Estate. Villas in Bangalore starting @ Rs.66 lacs