Kingfisher Airlines GDR Issue on Hold

Mumbai: Kingfisher Airlines Ltd. has put on hold its plan to raise about $200 million through an issue of global depositary receipts until it gets an approval from banks to restructure its debt, a person with direct knowledge of the matter said recently.
"I don't think there are legal barriers in going for an issue before the restructuring," the person, who didn't want to be identified, told Dow Jones Newswires. "But it would make more sense to wait since it would have a positive impact on investor sentiment."
India's second-biggest airline by market share recently got board approval for the GDR issue and has appointed Citibank, Morgan Stanley, CLSA and UBS to manage the sale. In order to attract positive investor sentiment, the airline must first deleverage its balance sheet, which is burdened with 60 billion rupees ($1.29 billion) of debt.
Kingfisher has already appointed SBI Capital Markets Ltd. to prepare a debt restructuring plan. The airline, controlled by billionaire Vijay Mallya, has been in the red since it began operations in 2005.
16/09/10 Anirban Chowdhury/Wall Street Journal

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Categories: Foreign Sep 2010, Kingfisher Sep 2010