Promoters of Airlines");'> Kingfisher Airlines (KFA) might convert Rs1,500 crore (Rs15 billion) they lent to the airline into equity, chief executive Sanjay Aggarwal said.
The UB Group-run KFA is seeking fresh credit support to revive the airline following three successive loss-making seasons. Lenders are yet to approve KFA's request for fresh funds, including working capital loans and guarantees, and have sought the promoters bring in equity to recapitalise the airline.
The conversion of debt into equity will help fulfil the condition.
The airline expected the debt conversion as well as additional funding from external investors and more loans to help it raise $500-600 million (roughly Rs2,500-3,000 crore) in six-eight weeks, Aggarwal said.
The airline spokesperson did not respond to an SMS query sent by this paper. 'We are in talks with several investors in India and overseas,' Mr Aggarwal said.
'Apart from that, our founders have Rs10 billion (Rs1,000 crore) in loans with the airline and another Rs5 billion (Rs500 crore) in optionally convertible debentures, which can be converted into equity,' he said.
Last Tuesday, KFA allotted equity shares against optionally convertible debentures to save interest costs.
In a filing to the BSE, the airline said it had issued 79.8 million equity shares to LKP Securities, Redect Consultancy and Star Investments at Rs25.01 apiece, in lieu of conversion of debentures.
KFA has debt of about Rs6,000 crore (Rs60 billion), following a restructuring exercise in November 2010.
As part of that, promoter loans of Rs656 crore (Rs6.56 billion) were converted into compulsorily convertible preference shares. Another Rs1,137 crore (Rs11.37 billion) worth inter-corporate deposits were converted into OCDs to reduce the debt burden.
Meanwhile, civil aviation minister Ajit Singh said in Bengaluru on Wednesday KFA could not be closed just because it was making losses and banks were not helping it with funds.
'You can't close down a company because they are making losses or banks are not giving them money.
'As long as passenger safety is not jeopardised, as long as they keep their schedule, why should we close down any industry?' Mr Singh said.
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The UB Group-run KFA is seeking fresh credit support to revive the airline following three successive loss-making seasons. Lenders are yet to approve KFA's request for fresh funds, including working capital loans and guarantees, and have sought the promoters bring in equity to recapitalise the airline.
The conversion of debt into equity will help fulfil the condition.
The airline expected the debt conversion as well as additional funding from external investors and more loans to help it raise $500-600 million (roughly Rs2,500-3,000 crore) in six-eight weeks, Aggarwal said.
The airline spokesperson did not respond to an SMS query sent by this paper. 'We are in talks with several investors in India and overseas,' Mr Aggarwal said.
'Apart from that, our founders have Rs10 billion (Rs1,000 crore) in loans with the airline and another Rs5 billion (Rs500 crore) in optionally convertible debentures, which can be converted into equity,' he said.
Last Tuesday, KFA allotted equity shares against optionally convertible debentures to save interest costs.
In a filing to the BSE, the airline said it had issued 79.8 million equity shares to LKP Securities, Redect Consultancy and Star Investments at Rs25.01 apiece, in lieu of conversion of debentures.
KFA has debt of about Rs6,000 crore (Rs60 billion), following a restructuring exercise in November 2010.
As part of that, promoter loans of Rs656 crore (Rs6.56 billion) were converted into compulsorily convertible preference shares. Another Rs1,137 crore (Rs11.37 billion) worth inter-corporate deposits were converted into OCDs to reduce the debt burden.
Meanwhile, civil aviation minister Ajit Singh said in Bengaluru on Wednesday KFA could not be closed just because it was making losses and banks were not helping it with funds.
'You can't close down a company because they are making losses or banks are not giving them money.
'As long as passenger safety is not jeopardised, as long as they keep their schedule, why should we close down any industry?' Mr Singh said.
....more info