Listed entity Kingfisher Airlines is likely to come out with a one-on-one rights issue in order to raise nearly Rs400 crore and begin the process of retiring a mountain of debt. The Bangalore-headquartered airline faces a debt burden of Rs6,000 crore and a high debt-to-equity ratio.
Market reports suggest that the struggling carrier has been advised by bankers to infuse equity into the airline before opting for any fund-raising plan. Reports also suggest that the troubled carrier may have appointed SBI Capital as the arranger for the issue.
The carrier has a current market capitalisation of Rs 1,341 crore.
Kingfisher Airlines has been itching to raise public money for quite some time, and has said earlier that it may seek to raise between Rs500-750 crore through a share sale if government policy not to allow foreign carries to invest directly in Indian carriers did not change.
Promoter Vijay Mallya has earlier expressed his preference for a strategic investor over financial investors. Financial investors, other than airlines, may own up to 49% of the paid-up equity of the domestic carriers.
Kingfisher has recently appointed US aerospace and aviation advisory firm Seabury to rope in investors.
Thursday, February 11, 2010
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