New Delhi: Kingfisher Airlines Ltd has asked suppliers and others to whom it owes money, to be patient because the carrier has been unable to raise money even as its stock price has fallen since December.
Kingfisher has told airport operators and oil companies, among others, that the airline will pay them off after it sells global depository receipts (GDRs) to raise $300 million.
The company’s chairman Vijay Mallya, in a letter to at least one of the suppliers, written late last month and reviewed by Mint, however, did not specify a time frame for the GDR issue.
Kingfisher had originally planned to launch the GDR after December. But with its shares falling 43% to Rs.41 each on Wednesday from nearly Rs.72 three months ago, it is yet to do so. The Bombay Stock Exchange’s benchmark index, the Sensex, has slipped 7.49% in the same period. Mallya wrote in his letter that the GDR cannot be issued at the current price value.
An email sent to a Kingfisher spokesman on Tuesday didn’t elicit a response.
The airline, India’s second largest by passengers carried, is yet to make profits since it was established in 2005.
Reserve Bank of India, India’s banking regulator, allowed it to undergo a debt recast last year, which will cut its debt to Rs.6,007.30 crore from Rs.7,651.12 crore, the airline said on its website.
10/03/11 Tarun Shukla/Live Mint
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