UB Group outlines financing plans for Kingfisher Airlines
UB Group CFO Ravi Nedungadi stated Kingfisher Airlines has raised around INR8 billion (USD148 million) of loans in 2011 from Vijay Mallya’s “friends, relatives and well wishers” (DHNS/Business Standard/Economic Times/Bloomberg/The Hindu/Business Standard, 15-Nov-2011). That debt may be partly or completely converted into equity of the carrier during the rights offer, he added. Mr Nedungadi also stated the carrier plans to raise INR10 billion in loans. The carrier has sought a term loan of INR1.5 billion to reconfigure its aircraft, he added. Dr Mallya has stated the carrier plans to increase in working capital limit by around INR6 billion (USD119 million) to INR7 billion (USD138 million) and a reduction of interest cost burden through a mechanism by which close to INR12 billion of high-cost rupee debt will be converted to foreign currency loans that attract lower rates. The carrier has also requested the banks cover the INR10 billion which it deposits to lessors into letters of credits. The carrier is also proceeding with plans to raise up to INR20 billion by the end of the current fiscal year through a right issue.