 "Kingfisher flies high on bourses but a hard landing is inevitable")
Shares of Kingfisher Airlines today again surged 10 percent for a third consecutive day after UB Group chairman Vijay Mallya reiterated that he is hopeful of reviving grounded Kingfisher Airlines (KFA), as talks are on with an investor keen on the debt-ridden carrier.
The outcome is likely to be known in 90 days. However_, Daily Mail_ reported yesterday that the foreign investor so keen to put money in a dying airline is from Saudi Arabia while the Mint reported this morning that the same investor has strong ‘Maharashtra links’ and plans on pumping in nearly Rs 1,000 crore after clearing part of the airline’s dues.
“The idea is to opt for a limited re-start with five Airbus planes and three ATR planes,” Mint said, quoting a person familiar with the deal details
Meanwhile, United Breweries Holdings Ltd (UBHL), the holding company of the UB Group, is considering a continued investment in the airline and would pay a month’s salary to Kingfisher employees, who have not received pay for the last 13 months.
Shares of the company have surged 33 percent this week amid revival hopes for the defunct airline. Kingfisher was one of the top traded stocks on the NSE this morning and ET Now reported than 47.3 lakh shares were traded in a block deal at a price of Rs 6.21 per share.
At 10:21 am, Kingfisher stock was up 9.91 percent at Rs 6.21 post the block deal.
Parent UBHL has filed an application before the Karnataka high court seeking permission to pay Rs 13 crore towards one month’s salary to employees of the grounded airline.
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More Shorts“In view of the fact that Rs 379.75 crore is available in the fixed deposit, the applicant seeks leave of this court to pay an amount of Rs 13,07,14,523 being the quantum of one month’s salary of 2,126 employees of Kingfisher Airlines for the month of August 2012, from out of the said amount in the deposit,” an Economic Times report said, quoting UBHL’s application.
However, Mallya’s optimism has not gone down well with UB Group creditors who have opposed the group’s plan to infuse funds into the grounded airline.
“Creditors fighting hard for dues of about Rs 600 crore from UB Holdings have objected to the plan. A bench of the Karnataka high court comprising judges D Bhosle and L Manoharan adjourned the hearing of the case to Monday,” the Business Standard reported today.
Kingfisher Airlines has remained grounded for almost a year now under the burden of huge debts totalling over Rs 7,000 crore and accumulated losses of more than Rs 16,000 crore.
Last week, Indi’as largest lender SBI sent a ‘wilful default’ notice to Kingfisher Airlines (KFA) after attempts at recovering dues from the airline did not yield results.
Earlier, in May, a consortium of lenders led by SBI had served KFA with a Sarfaesi notice, after which the company was given a 60-day repayment period. However, due to its failure to repay, lenders took charge of the Kingfisher House, which they are yet to auction.
[caption id=“attachment_1110185” align=“alignleft” width=“380”]  Vijay Mallya. Reuters.[/caption]
Lenders have earned just Rs 680 crore so far from the sale of pledged shares of United Spirits, Mangalore Chemicals & Fertilisers and KFA.
Besides attaching property, lenders are invoking corporate and personal guarantees provided by Vijay Mallya as part of their efforts to recover their money.
Mallya is also battling against aircraft lessors and financiers who moved the Karnataka High Court for winding up the company for defaulting on loans by his holding company - United Breweries Holdings Ltd.
If indeed Mallya manages to rope in an investor against all odds, it will be nothing less than a miracle.
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