TheSe are not the best of times for the ‘king of good times’. Vijay Mallya is now busy trying to revive his debt-ridden Kingfisher Airlines whose planes keep getting grounded periodically for delay in payment of some or the other dues. Cash-strapped, the tycoon this week sold 42.5 per cent stake in his Formula One team, Force India, to the Sahara group for $100 million.
Thursday, oil-marketing company HPCL stopped aviation fuel supply to Kingfisher Airlines in Mumbai and Delhi after it failed to clear a pending bill. The airline has an outstanding bill of Rs 634 crore with HPCL. Now, the oil firm is selling fuel only on cash payment. IOC and BPCL too have put Kingfisher on cash-and-carry terms.
Mallya recently announced closing of the low fare brand, Kingfisher Red, due to high operating expenses and low yields. Industry experts say the brand had turned into a millstone rather than the flying billboards Mallya had intended it to be.
Mallya, India’s clone of Virgin’s Richard Branson, made a slew of acquisitions in 2007 in the scotch and whisky, Formula One and aviation segments. He bought out loss-making Air Deccan. The low-fare business continued to stretch Kingfisher’s balance sheet. Another was the acquisition of Whyte & Mackay, which he acquired for around Rs 3,000 crore. He has also acquired an IPL team, Royal Challengers Bangalore, which is yet to report profit.
15/10/11 Rupesh Subhash Janve/mydigitalfc.com
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