Kingfisher Airlines Ltd. (KAIR), controlled by billionaire Vijay Mallya, slumped in Mumbai trading after it cut flights and approached India’s government for help as it works to restructure debt and pare losses.
The airline, India’s second-biggest by market share, fell 9.5 percent to 19.65 rupees at close of trading in the city. The stock earlier plunged 19 percent, the most in three years. United Breweries (Holdings) Ltd., Mallya’s holding company and Bangalore-based Kingfisher’s biggest shareholder, fell 8.7 percent.
India’s finance ministry may ask banks to help Kingfisher restructure its debt after the carrier sought the government’s assistance, Civil Aviation Minister Vayalar Ravi said in New Delhi today. Kingfisher has scrapped 167 flights since Nov. 8 and some of its lessors plan to reclaim aircraft because of overdue fees, the Economic Times newspaper reported, without saying where it got the information.
“Unless there is an infusion of money at this point, I don’t really see how it’s going to survive,” said Rishikesha Krishnan, a professor of corporate strategy at the Indian Institute of Management, Bangalore, who has written papers about Indian aviation. “That infusion of money has to come from Mallya. I can’t see anybody else who’s going to put money in.”
11/11/11 Siddharth Philip and Karthikeyan Sundaram /Bloomberg
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