Kingfisher may raise Rs 300 cr debt soon

Bangalore: Kingfisher Airlines, owned by Vijay Mallya’s liquor-to-airlines UB Group, plans to raise Rs 300 crore of debt in the near future. This will increase its current debt book to around Rs 7,800 crore — a leverage of almost 25 times.
The debt will be from a consortium of banks led by India’s largest lender State Bank of India to help the airline in its operational expenditure. The aviation industry is going through a bad patch due to the slowdown, higher operational expenditure and rising aviation turbine fuel prices.
Vijay MallyaMajor players in the sector —Jet Airways, Kingfisher Airlines and Air India — have a combined debt book of Rs 50,000 crore according to the Centre for Asia Pacific Aviation and are seeking help from the government to restructure their books. Till that happens, many players are looking to raise funds to meet their rising operational expenditure needs.
The company also plans to raise funds through issuance of global depository receipts (GDRs). “We are planning to raise Rs 440 crore though the GDR route in the next few weeks and have started the process with the appointment of Linklatera, a London-based legal firm,” said A K Ravi Nedungadi, president and chief financial officer of UB Group. It is expected that Kingfisher Airlines will look at the Luxemburg Exchange to list the GDR.
08/04/10 Business Standard

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Categories: Kingfisher Apr 2010