Mallya battles angry shareholders

Confirms talks underway with strategic players

At Kingfisher Airlines’ annual general meeting on Wednesday, Chairman Vijay Mallya once again assured aggrieved shareholders he would get the company back into shape.

A year earlier, Mallya had uttered the same words. However, since then, the condition of the company has worsened.

Compared with aircraft strength of 66 earlier, Kingfisher Airlines now has about 40 aircraft, of which 15 are operational. It is understood the airline has lost about four slots in the Mumbai airport. The airline, which earlier operated about 360 flights a day, currently operates merely 80 flights a day.

The company’s debt has risen to about Rs 9,000 crore, on a negative net worth, and it has failed to record a profit in the six years of effective operations.

Many shareholders were critical of how the company’s debt had spiralled out of control and the fact that the management had not taken active steps to prevent this. Some even termed the management ineffective, adding it needed a change. Also, many shareholders said if the current management continued to be in place, the government’s recent announcement of allowing foreign direct investment into the civil aviation sector wouldn’t be of much help to the company. Some, however, supported Mallya, saying all businesses saw ups and downs. Mallya, they added, should turn the situation around as soon as possible.

Mallya told shareholders while the situation was tough, given the operating conditions, all efforts to recapitalise the company had been made. “What can I say in such a situation, when the media is on an overdrive, writing negative stories on Kingfisher? But my responsibility is towards the shareholders and I can assure we are putting in all efforts to put the company back into shape,” he said. “FDI in aviation has been opened up, and we are engaged with a few strategic global players, in addition to few Indian investors,” he added.

A few shareholders said Kingfisher’s dismal state of affairs was affecting the UB Group. Some said it was sad Kingfisher Airlines employees were not being paid salaries since the past four to six months.

Shares of KFA on Wednesday surged about 9 per cent after Mallya said the carrier was in talks with foreign airlines for a possible stake sale.

“It is indeed an unfortunate truth that sala-ries are pend-ing,” Mallya said.

Adding the company was sensitive to this aspect, even helping employees during emergencies. “Even the top VPs (vice-presidents) haven’t drawn salaries and are leading the company from the front,” he said.

So far this financial year, promoters had infused Rs 1,154 crore into the company, he said.