Kingfisher Airlines brings down FDI level to 49%

New Delhi: UB Group-controlled Kingfisher Airlines has brought down foreign stake in the company from around 53% to 49%, just within the prescribed foreign investment cap of 49% permitted in the airline business in India.
Last year, the foreign investment promotion board (FIPB) had raised objections to the United Breweries (Holdings) (UBHL)’s proposal seeking approval for raising Rs 708 crore by issuing fully convertible equity warrants to FirStart Inc, a company owned by UB Group promoter Vijay Mallya’s mother, Lalitha Mallya, and headquartered in the British Virgin Islands. The FIPB had found out that the move would result in FDI hike in the airline well above 52%, which is not permitted under FDI gudielines. Though, the board cleared the proposal,it directed the company to bring down the FDI within a specified time-frame.
According to the proposal, UBHL had plans to use the money from FirStart to invest in various UB Group ventures including Kingfisher Airlines (in which it owns 32.48%), McDowell Holdings (36.17%), Kingfisher Finvest and UB Infrastructure Projects (both wholly-owned) and UB Electronics (96.25%). Now it is learnt that the airline has managed to bring down the foreign investment by offloading some equity to the promoters, a source close to the development said.
17/06/10 Rajat Guha/Financial Express

To Read the News in full at Source, Click the Headline

Categories: Kingfisher Jun 2010