Kingfisher Airlines mulls rights offer, GDR sale to reduce debt

New Delhi: Kingfisher Airlines Ltd may raise as much as $175 million (Rs843.5 crore) selling shares and global depository receipts, or GDRs, to repay debt.
The carrier may seek between $80 million and $100 million in a rights offer and a further $60-75 million selling GDRs, Ravi Nedungadi, chief financial officer of the airline’s parent UB Group, told UTV television channel. The money may be raised within six months, he said in an interview.
Kingfisher Airlines has Rs6,000 crore of debt, almost a third of it coming from payments made to purchase new aircraft, Nedungadi said on Tuesday. Unprofitable Kingfisher, Jet Airways (India) Ltd, the nation’s largest domestic carrier, and other airlines are all seeking to sell new shares to pare debt and interest payments amid losses from a slump in travel demand.
Kingfisher earlier this year delayed taking delivery of Airbus A380 aircraft to 2014 from 2012 after scrapping three orders with the plane maker last year.
The airline’s passenger numbers fell for a third consecutive month in August, according to government data. Kingfisher will bring in a strategic partner if government rules permit, Nedungadi said. The company hasn’t pursued expressions of interest made by foreign airlines as the rules don’t permit overseas carriers from buying stakes in local airlines, Nedungadi said.
22/09/09 Saikat Chatterjee/Bloomberg/Livemint

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Categories: Kingfisher Sep 2009