Kingfisher Airlines delays GDR sale after slump in stock prices

New Delhi: Kingfisher Airlines Ltd won’t start selling global depository receipts (GDR) to raise up to $350 million (Rs.1,579 crore) until its stock recovers and market conditions improve, raising concerns at some vendors as their payments are linked to the issue.
The Mumbai-based carrier had planned a GDR issue soon after December but that’s been stalled by the slump in its shares, said two persons familiar with the matter who declined to be named.
The Vijay Mallya-owned airline, which hasn’t made a profit since its inception in 2005, has appointed investment banks CLSA Singapore Pte Ltd, Citigroup Global Markets Ltd and Morgan Stanley and Co. International plc to manage the GDR issue, said the official.
Global legal firm Linklaters Llp is preparing the prospectus, the official said.
“The offer price for the GDR is determined on the last two weeks’ average; so if your offer price is lower than the two-week average, investors, the minute they write your check, will go into a loss in their books,” said one of the persons cited above.
He expects the airline to target March for the issue, before the fiscal year ends.
22/02/11 Tarun Shukla/Live Mint

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Categories: Kingfisher Feb 2011