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Confirms talks underway with strategic players
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Confirms talks underway with strategic players
At Kingfisher Airlines’ annual general meeting on
Wednesday, Chairman Vijay Mallya once again assured aggrieved shareholders he
would get the company back into shape.
A year earlier, Mallya had uttered the same
words. However, since then, the condition of the company has worsened.
Compared with aircraft strength of 66 earlier,
Kingfisher Airlines now has about 40 aircraft, of which 15 are operational. It
is understood the airline has lost about four slots in the Mumbai airport. The
airline, which earlier operated about 360 flights a day, currently operates
merely 80 flights a day.
The company’s debt has risen to about Rs 9,000
crore, on a negative net worth, and it has failed to record a profit in the six
years of effective operations.
Many shareholders were critical of how the
company’s debt had spiralled out of control and the fact that the management
had not taken active steps to prevent this. Some even termed the management
ineffective, adding it needed a change. Also, many shareholders said if the
current management continued to be in place, the government’s recent
announcement of allowing foreign direct investment into the civil aviation
sector wouldn’t be of much help to the company. Some, however, supported
Mallya, saying all businesses saw ups and downs. Mallya, they added, should
turn the situation around as soon as possible.
Mallya told shareholders while the situation was
tough, given the operating conditions, all efforts to recapitalise the company
had been made. “What can I say in such a situation, when the media is on an
overdrive, writing negative stories on Kingfisher? But my responsibility is
towards the shareholders and I can assure we are putting in all efforts to put
the company back into shape,” he said. “FDI in aviation has been opened up, and
we are engaged with a few strategic global players, in addition to few Indian
investors,” he added.
A few shareholders said Kingfisher’s dismal
state of affairs was affecting the UB Group. Some said it was sad Kingfisher
Airlines employees were not being paid salaries since the past four to six
months.
Shares of KFA on Wednesday surged about 9 per
cent after Mallya said the carrier was in talks with foreign airlines for a
possible stake sale.
“It is indeed an unfortunate truth that
sala-ries are pend-ing,” Mallya said.
Adding the company was sensitive to this aspect,
even helping employees during emergencies. “Even the top VPs (vice-presidents)
haven’t drawn salaries and are leading the company from the front,” he said.
So far this financial year, promoters had
infused Rs 1,154 crore into the company, he said.
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