Kingfisher Founders on the Way to Convert Debt into Equity
Company's Chief Executive sais that the airline anticipates the debt conversion as well as additional funding from external investors and more loans to assist it raise $500-600 million in the next 6-8 weeks.
A senior executive declared on Wednesday that the founders of Kingfisher Airlines Ltd. may convert $306 million they have lent to the airline into supplementary shares, satisfying a key demand from banks for more equity mix. (Kingfisher's founders include liquor baron Vijay Mallya, United Breweries (Holding) Ltd., Kingfisher Finvest India Ltd. and UB Overseas Ltd.)
Chief Executive Sanjay Aggarwal said that the airline anticipates the debt conversion as well as additional funding from external investors and more loans to assist it raise $500-600 million in the next 6-8 weeks.
Mr. Aggarwal disclosed, "We are in touch with numerous investors in India and overseas". He added, "Above that, our founders have 10 billion Rs. in loans with the airline and another 5 billion Rs. in partially convertible debentures which can be converted into equity”. He even cleared saying that the founders have already converted 2 billion rupees of debentures into equity.
He also said that Kingfisher is in talks with two Indian investors to sell a total 24% stake to one or both the parties. Mr. Aggarwal didn't elaborate on the methods that could be used to sell the stake, or the names of the investors.
On the other hand, “Kingfisher's lenders have put its requests for further debt on hold till the airline gets some equity investment”. State Bank of India Chairman Pratip Chaudhuri declared over Tuesday that the airline has to obtain equity infusion of up to 408 million to live buoyant.
Mr. Aggarwal said the airline is still in talks with tax officials to lift the freeze on its accounts and hopes to find a solution in "a day or two."
