Do or die? Kingfisher surges ahead of lenders' meet

Shares of Kingfisher Airlines surged 4.11 percent in early trade on a volume of 3.99 million shares, ahead of a meeting of the creditors to discuss the future of the loans given to the troubled carrier.

The debt-ridden airline has been struggling to raise funds to stay afloat.

The lenders have lost hope that the company will be able to bring in capital and may resort to sales of its assets, a Reuters report said.

Kingfisher has a debt of $1.4 billion as of March-end. The _Reuters r_eport said three bankers involved in the process would consider invoking securities and guarantees against the debt to recover their money.

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[caption id=“attachment_367866” align=“alignleft” width=“380”]  The lenders have lost hope that the company will be able to bring in capital and may resort to sales of its assets[/caption]

On Monday, media reported that ICICI Bank has sold Kingfisher loans amounting to around Rs 400 crore to SREI Infrastructure Finance.

With the huge debt on its book, the airline is unlikely to attract any interest from foreign airlines even if the government manages to bring about the legislation regarding this.

Vijay Mallya has pledged nearly 95 percent of his shareholdings in the airline to lenders, a Firstpost blog said earlier.

The total current market value of Kingfisher is Rs 960 crore, but Mallya owns only Rs 30 crore worth of shares that are unencumbered. This means his lenders are the real owners of the airline.