Kingfisher Airlines: Flying high

Mumbai: Kingfisher Airlines (KFA) has seen renewed investor interest, with the Reserve Bank of India’s approval seen favourable for the company’s impending global depository receipt (GDR) and domestic issues. KFA plans to raise $250 million (about Rs 1,100 crore) through GDRs and Rs 500 crore through a domestic issue in the next couple of months.
The board has also approved a plan to increase preference share capital to Rs 2,600 crore from Rs 100 crore to facilitate the debt recast. The move has seen the board of United Breweries (Holdings) Ltd, its holding company, approve conversion of loans of about Rs 650 crore into preference share capital.
Reports suggest KFA is seeking a two-year moratorium on the interest payment on its debt, which it hopes to repay over the next seven to nine years. With total debt of about Rs 7,922 crore and interest cost of nearly Rs 1,100 crore against a net loss of Rs 1,290 crore, the company had an interest coverage ratio of -0.84 per cent as of March.
Operationally, the year 2010 has spelt a strong revival of the aviation sector.
01/10/10 Priya Kansara Pandya & Sunaina Vasudev/Business Standard

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Categories: Kingfisher Oct 2010