Kingfisher gets okay for debt-equity swap

Mumbai: The board of Kingfisher Airlines today approved a debt recast package under which 30 per cent of the troubled carrier’s debt of Rs 6,500 crore would be converted into equity.
The move follows the RBI’s relaxation of its debt restructuring guidelines. Under the plan, debt worth Rs 1,355 crore from lenders and Rs 648 crore from the promoters will be converted into shares of the airline.
The move is likely to give a shot in the arm to the private carrier that has been attempting to pare its loans at a time the aviation sector has recovered from a two-year slump.
The debt recast also allows the airline to pay back the remaining debt of Rs 4,497 crore to lenders over a nine-year period. This includes a moratorium of two years.
Kingfisher has secured a 3.5 per cent reduction in interest rates to 11 per cent, the airline spokesperson said.
25/11/10 The Telegraph

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Categories: Kingfisher Nov 2010