Will Hong Kong company invest $280 mn in Kingfisher?

Some one has rightly said, “When one door closes, another opens” and debt-laden Kingfisher Airline must surely believe in this now. According to a report, in the Economic Times, SC Lowy is in talks with the airline to invest about $280 million to help turn around the situation.

The Hong Kong basedcompany specialises in buying into illiquid assetsto create liquidity for them.Illiquid assets are defined as those assets which cannot be readily converted into cash.

This deal is a lifeline for the airline, as fierce competition and rising costs saw it pile a huge debt of Rs 7,000 crore.The airline has also defaulted on paying the salary of its pilots for over two months. Twenty one of its 60 aircraft are also grounded due to a dispute with its lessors.

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This news comes at a particularly good time for the company. One one hand banks are refusing to lend it more money and on the other, there are rumours of its CEO Sanjay Aggarwal being on his way out of the company.

News about the Hong Kong company’s interest in Kingfisher, led to a four percent rise in the stock of Kingfisher Airlines during early trade.

However, it shed some of those gains and closed up 1.5 percent at Rs 25.65 per share from the previous day.

Overall, it seems that the talk of the investment has been taking place for some time now and a deal may be struck by the end of the month, a source told the Economic Times.