Kingfisher Airlines to raise up to Rs 500 cr through equity
BS Reporter / Bangalore Jul 21, 2009, 17:40 IST
Kingfisher Airlines, owned by UB Group, is planning to raise up to Rs 500 crore through issue of further share capital. Company officials indicate that this may be through a number of options including a follow-on public or rights issue.
The airline, which is laden with significant debt and losses, has been in discussions with private equity players for the past nearly 12 months and has been trying to raise Rs 1,200 crore through equity ever since it merged with Deccan Aviation. The company however has raised debt in its place and according to industry sources the debt in the company is around Rs 6,000 crore on a base of Rs 270 crore, a leverage of 22 times.
Indian billionaire Vijay Mallya who own this airline has also been lobbying with the Indian government to allow strategic overseas airline players to have a stake in the Indian civil airlines and according to company sources, "there has been some movements in that direction."
Kingfisher Airlines officials noted that they are hopeful that move will happen and until then they will have to raise equity so as to avoid piling on debt.
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