Kingfisher Airlines: 90% promoter stake pledged; shares fall

Mumbai: A day after two promoters of Kingfisher Airlines- United Breweries and Kingfisher Finvest India - pledged all their shares in the airline with lenders, shares of Vijay-Mallya’s Kingfisher Airlines have fallen in an upbeat market.

The share price of Kingfisher Airlines today fell by 0.6 percent to close at Rs 39.30, even as the BSE benchmark Sensex surged ahead by a whopping 351.33 points, or 1.9 percent, amid an overall strong market sentiments.

[caption id=“attachment_38067” align=“alignleft” width=“380” caption=“The two promoters together hold nearly 20.6 crore shares, which are currently worth over Rs 800 crore. Reuters”] [/caption]

United Breweries holds 40.01 percent stake in the airline, while Kingfisher Finvest India holds 12.75 percent stake. Now the entire shareholding is pledged. The other promoter entities of the airline include Mallya himself and UB Overseas. While Mallya holds 3.04 percent stake in his personal capacity, UB Overseas has 2.72 pe cent. These are the only two entities whose shares are not pledged currently.

The two promoters together hold nearly 20.6 crore shares, which are currently worth over Rs 800 crore.

The airline, which operates under Kingfisher and Kingfisher Red brands, has a market value of Rs 1,950 crore. “The equity shares were pledged pursuant to requirements prescribed under the debt recast package entered into by Kingfisher Airlines with certain lenders,” Kingfisher said, but did not disclose the name of the lenders.

The latest round of pledging took place on 16 June, when United Breweries Holdings pledged about 11.3 crore shares, taking its total number of pledged shares to 19.9 crore. On the same day, Kingfisher Finvest India pledged 23.2

lakh shares, taking its total pledging to 6.34 crore shares.

Till June 3, nearly 50 percent of the airline’s total promoter holding was pledged, which is now estimated to have increased to over 90 percent. Its major non-promoter shareholders include SBI (5.7 percent), ICICI Bank (5.3 percent), IDBI Bank (3.5 percent), Bank of India (1.75 per cent), Uco Bank (1.4 per cent) and Punjab National Bank (1.14 per cent).

These banks are believed to have acquired shares after conversion of their loans into equity earlier this year. The airline had restructured its debt in April to reduce its debt by nearly one-fifth to about Rs 6,000 crore, by agreeing to certain lender banks converting loans worth Rs 750 crore into shares worth 23 per cent stake in the company.

The airline has been struggling financially for many years now and it suffered a loss of over Rs 1,000 crore in the fiscal year ended March 2011. Prior to this, it had posted a net loss of Rs 1,647 crore in 2009-10.

PTI

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