Kingfisher in talks with foreign airlines: Mallya

Bangalore, Sept. 26:  

Kingfisher Airlines is in talks with a few foreign carriers as also domestic investors for a possible stake sale, confirmed Chairman Vijay Mallya on Wednesday.

This gave the airline stock a near-9 per cent boost. On the BSE, the stock gained about 10 per cent intra-day before settling at Rs 15.70, up 8.65 per cent.

“We are in talks. But the FDI announcement has just come in. So, it is early days,” Mallya told newspersons on the sidelines of the Airline’s AGM.

Mallya is to meet the consortium of bankers on Thursday to make a presentation. “I can confirm that there is a meeting with the consortium tomorrow. We will make a presentation to them as requested,” he said. Mallya said the airline had a meeting with the consortium last month as well. “We obviously have to keep meeting (our) bankers,” he said.

At the AGM, Mallya told shareholders that the promoters had infused Rs 1,154 crore since April, 2012. Hitting out at the media, he said that “reports on Kingfisher trouble are utterly baseless.” He said the airline’s share prices are taking a beating because of “sustained negative media reports.” He also claimed that airlines making profits are doing so either because of international operations or through the sale-and-lease-back model.

He denied that Kingfisher had only seven aircraft operational. About 40 aircraft are operational and the remaining 25 would be back on air after recapitalisation. “Every airline is struggling and so it was prudent to cut back capacity to contain losses,” he said.

Mallya said low-cost model was not the only option to make profits and hence the airline was in the process of reconfiguring seats to become a full service carrier.

Shareholders angry

But shareholders were unimpressed with Mallya’s explanation and blamed the current management for the poor state of the company. Some said even FDI would not rescue the airline because the management was inefficient. A vendor for the airline said the company should consider converting the amounts due to him and others into equity shares at a discounted price.

http://www.thehindubusinessline.com/todays-paper/article3939724.ece