Kingfisher to sell properties after banks give 15-day deadline

NEW DELHI India’s cash-strapped Kingfisher Airlines said on Thursday that it plans to start selling some unused real estate to raise much-required funds after lenders gave the airline 15 days to come up with “concrete steps” to improve its operations, a senior executive at its lead bank said on Thursday.

Kingfisher, controlled by Vijay Mallya, has never made a profit in a struggling Indian airline industry and has seen its domestic market share fall from second to last among the country’s six big carriers after grounding most of its fleet.

“They have to give us a report on what steps they have taken so far, what challenges they are facing,” an executive with State Bank of India said after meetings between the airline and banks.

SBI is the leader of a
consortium of lenders to Kingfisher, which had $1.4 billion in debt at the end
of March. “They will have to come up with concrete steps to improve operations in 15 days, otherwise we will have to take some other actions,” said the banker, who declined to be named or give specifics.

The executive also said banks expected to recover about $25 million from the sale of Kingfisher properties in Mumbai and Goa.

“We told them you have to put these on the block and they have agreed,” the SBI executive said, referring to the Mumbai and Goa properties. “There is no point in keeping non-core, unused assets.”

He said the proposal to sell the two properties was made about seven to eight months ago.

Kingfisher said in a statement that it is “patently wrong and false to claim
or state that banks have started recovery proceedings” and said there was
no such discussion at Thursday’s meeting.

Kingfisher House in Mumbai has been vacant after staff moved to new offices, the company said.

“At that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today’s meeting we raised the issue of this pending approval,” it said in a statement.

Earlier this week, bankers said they were losing hope the carrier would be able to bring in an outside investment anytime soon and may sell assets held against their loans.

http://www.omantribune.com/index.php?page=news&id=123004&heading=Business

Kingfisher Airlines offers to sell pledged assets, lenders want more

MUMBAI: Debt-laden Kingfisher Airlines indicated for the first time its willingness to sell a plush villa in Goa to pay off a part of its debt, but lenders to the stricken airline insisted on more contribution from the promoters before parting with more money.

Bankers participating in a meeting of 17 bankers to the airline in Mumbai on Thursday asked the Kingfisher management to pay fees on the guarantees and letter of credit which is due for renewal. They also asked the management to come up with concrete plan on settling their dues.

The management, represented by CEO Sanjay Aggarwal and UB Group chief financial officer Ravi Nedungadi, told the banks that they would not be able to pay any money immediately. Talks are going on with private and foreign players to secure equity funding, they added.

Kingfisher has shut most of its operations after a severe cash squeeze left it with little money to pay for fuel, aircraft leases and salaries. It has fewer than 20 aircraft at its disposal and many of its employees are looking for work as salaries have not been paid for more than six months.

It has borrowed more than Rs 7,500 crore and failed to pay on time. Most banks have classified the account as a sub-standard loan, which is a loan on which the borrower has defaulted. The management has offered to liquidate some of the pledged property such as the villa in Goa and the corporate office in Mumbai to repay part of the loans. The sale of both the buildings could fetch Rs 120-130 crore, they added.

"We are not happy with the interaction with company officials. The pledge property is valued at 130 at best while the outstanding loan is to the tune of Rs 7,500 crore," said a senior banker who was part of the meeting.

"The meeting was scheduled as an update meeting and there was no discussion on commencement of recovery proceedings. Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today's (Thursday's) meeting we raised the issue of this pending approval," a statement from Kingfisher said.

Most banks are unwilling to give more money since the account is already classified as a bad loan and fresh lending will be viewed as window dressing - an attempt to cover stress assets.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/kingfisher-airlines-offers-to-sell-pledged-assets-lenders-want-more/articleshow/14703193.cms

Fewer insurers bid for renewal of Air India policy cover

Premiums likely to go up marginally over last year, to $30 million tighter terms put off many

Premiums for Air India's annual insurance policy, coming for renewal on October 1, are likely to go up marginally to around $30 million (Rs 160 crore). This could be the highest ever premium outgo for the largest airline operator in the country. Last year, its premium outgo was $28 mn.

The marginal rise is in sync with the higher rates in the foreign market compared to last year and depreciation of the rupee. The fact that there were no major claims over the past two years and it is operating with about the same fleet size was part of the reason behind stable premium rates, sources said.

“With reinsurance rates firming up by five to 10 per cent around the world, the premium rates would go up marginally,” said reinsurance brokers directly associated with the deal. “Last year insurers had quoted higher rates on the account of operational inefficiencies of the national (government) carrier and some stringent conditions of the tender. However, this year there are no such issues,” added an insurance official.

HIGHLIGHTS

$9 billion: Total cover (fleet size) $30 million: Expect premiums outgo $28 million: Current premium New India Assurance-led consortium: Present insurer October-September: Policy period Annual: Frequency of renewal 3: Number of bidders

During 2011-12 (October-September), the premium rates went up by 15-20 per cent. However, its overall premium outgo was lower, as its fleet came down to $9 billion from $9.5 bn. Air India paid a premium of $30 million during 2010-11 for insuring its fleet, valued at $9.5 billion at that time.

This was 15 per cent higher than the previous year.

Apart from an increase in the fleet size, the Mangalore air crash which killed 158 played a major role in the increase in premiums and the cover.

Once considered a prestigious client, Air India policy is losing appeal among insurers, largely on the account of stringent tender norms, which includes upfront payment in the case of claims and low margins, brokers said.

Unlike last year, when all major private players and a consortium of the public sector insurers participated for the AI tender, only three bids were made for this year. The present insurer, the New India-led public sector general insurer consortium, ICICI Lombard, and SBI General participated.

According to a New India Assurance Company official, the main condition that is acting against larger participation is that insurers must guarantee full-claim settlement even if any re-insurer fails to pay its share.

The broker said the policy would cover three types of risks — aviation hull, terrorism and war cover, and the deductibles insurance. Premiums are generally based on the claims, time-performance and fleet conditions.

Aviation hull or the basic cover includes the aircraft, engines, third-party liabilities, baggage and cargo, whereas a deductible is the amount of money the insured party must pay before the insurance company's own coverage plan begins. The terrorism and war policy covers emergency risk.

Usually 85-88 per cent of the risk in the case of aviation policies in India are reinsured with foreign reinsurance companies, as the capacity of Indian general insurance companies is limited.

http://www.business-standard.com/india/news/fewer-insurers-bid-for-renewalair-india-policy-cover/479576/

Kingfisher strives to fly out of turbulence

With promoters unable to raise money, airline may find it difficult to sustain curtailed operations

Kingfisher Airlines Ltd, the cash-strapped carrier promoted by liquor baron Vijay Mallya, is set to enter tougher weather, with its financial woes mounting in a deteriorating macro economic scenario, leaving its lenders struggling to reduce their exposure to the carrier.

The airline owes nearly Rs 300 crore to the exchequer, and senior tax authorities have already attached its bank accounts for non-payment of dues. Kingfisher also owes Rs 100 crore to airport developers — GMR and GVK Group. Besides, employees, who haven’t got salaries for a few months now, have given an ultimatum to the management to pay them immediately

This is the present condition of the airline, which, until recently, was India’s second biggest by market share.

THE MACRO FACTORS HAVE NOT HELPED EITHER...

Fuel prices: Though oil prices have softened a bit, they were high for much of the last year. They have again started rising on fears the European Union could proceed with plans to introduce an embargo on oil supplies from Iran

Weak currency: The rupee has depreciated more than 20% in the last 12 months, pushing up the price of dollar-denominated costs such as fuel, aircraft leases, maintenance and offshore interest obligations

Airport charges: The regulator has approved a 334% increase in charges at Delhi airport, while the Mumbai airport has sought an increase in fees by 500%. The dual effect of these levies is likely to push Delhi-Mumbai airfares by 15-20% which could hurt traffic. Charges will also go up in Chennai and Kolkata to fund modernisation

Service tax: The extension of the service tax regime on economy class airfares from a fixed amount to an ad valorem percentage will increase fares by 12%

The operational staff of Kingfisher is expected to be around 1,300 now for the 12 aircraft it is operating, down from a massive 7,000 employee base for 66 aircraft by the end of 2011.

The airline has said its “excess employees” will be on leave till their “holding plan” gets sorted out and until its discussion with lenders and tax authorities fructify and it regains the original fleet strength, which now appears a distant possibility.

Kingfisher’s share price has fallen to almost a fourth in the past 12 months. It closed at Rs 11.94 on Thursday on BSE.

Today, the company is struggling to manage a debt of around Rs 8,000 crore, compounded by negative networth and precipitated by accumulated losses of around Rs 5,000 crore. Most of the operational income is going towards oil marketing companies and airport developers in a bid to keep at least 12 aircraft flying, without which the airline will grind to a halt.

Is Kingfisher hurtling towards a dead end?

“I don’t think Kingfisher has reached that situation yet,” said Kapil Kaul, CEO (South Asia) of Centre for Asia Pacific Aviation (Capa), a leading aviation consultancy firm.

WHILE IT HAS FAILED TO CLEAR ITS DUES...

Rs 8,000 cr Debt by the end of FY12, against about Rs 7,000 crore by the end of FY11 Rs 5,000 cr Accumulated losses Rs 1,300 cr Interest outflow Rs 300 cr Outstanding to exchequer Rs 100 cr Outstanding to airport operators 12 No of aircraft in operation (as on June 30, 2012) from 66 by end of 2011 1,300* No of employees (as on June 30, 2012) from 7,000 by end of 2011 Struggling to get extension of working capital limits *Estimated on the basis of around 110 personnel per aircraft. The rest of the employees were told to go on leave with part payment until operations stabilise

“With around 12 aircraft, they can still manage to stabilise the operations if equity infusion happens from an overseas carrier. Until then, it certainly will be a struggle, but I don’t think they will close down,” he added.

However, this is not a unanimous view among analysts and sector experts. “Kingfisher Airlines doesn’t have any other option but to shut down. From an average of 350 flights a day to around 90 flights now, it happened quite quickly. And from that, going down further is just a matter of time,” an analyst with a well-know Indian brokerage firm told Business Standard.

“It’s more likely that the lenders will be going for the last step of encashing the guarantees which they hold,” the analyst, who tracks the Indian aviation sector quite closely, said on condition of anonymity.

Added Jasdeep Walia, an aviation analyst with brokerage firm Kotak Securities Ltd: “In our view, Kingfisher could make further capacity reductions in the current quarter. Normally, the second quarter is the weakest for airlines, when PLF (passenger load factor) and hence yields are low and cash losses peak.”

Further cash losses and lack of working capital support from banks can lead to more capacity cuts by Kingfisher, he said. “As of April 2012, Kingfisher accounted for approximately six per cent of industry capacity,” added Walia.

The extent to which Kingfisher has been cancelling flights recently could be gauged from this. On Wednesday, it cancelled a total of 17 movements from Bangalore, while on Monday it cancelled 18 flights. Four flights were cancelled from Mumbai and three from Delhi, while important stations such as Hyderabad and Kolkata are not being served.

The airline has been, however, maintaining that there are some cancellations due to maintenance work and they are continuing with their holding plan until they get extended working capital limits from banks and the tax authorities defreeze their accounts.

A consortium of lenders led by State Bank of India is struggling to see how best they can try to get their returns. ICICI Bank Ltd has managed to get rid of the problem when it sold its Rs 430-crore debt exposure to a debt fund managed by Srei Infrastructure Finance Ltd. Other banks may not find such options coming in easily.

While the promoters have pledged as much as 90 per cent of their holding towards various lenders, which is now worth hardly around Rs 30 crore, bankers are mulling how best they can monetise the corporate guarantees that the UB Group has provided towards Kingfisher.

UB Holdings Ltd (UBHL), the primary promoters’ vehicle, has provided Kingfisher with corporate guarantees totalling Rs 9,135 crore. Each of these primary obligations is supported, in the first instance, by Kingfisher’s assets and cash flows and the UBHL guarantees are by way of additional collateral. It is this pie of corporate guarantees that the bankers may have to tap to recover their dues.

UBHL holds stakes in other group companies of UB Group -- United Breweries Ltd, United Spirits Ltd and Mangalore Chemicals and Fertilizers Ltd--which have also been pledged towards the lenders. The bankers’ first move may be to tap into these resources to press for further equity infusion from the promoters.

The airline has been sweating its equity as much as possible and a few steps such as encashing on its real estate holdings can just give them some breathing time until the foreign direct investment policy in the Indian aviation gets clearer.

The macro-situation for Kingfisher and for the Indian aviation sector in general is expected to deteriorate further.

“The oil prices and the volatility in the rupee are expected to dent the prospects of the Indian aviation sector during this financial year. In addition, the airports regulator has already approved a 334 per cent increase in charges at the Delhi airport, with Mumbai expected to be allowed to raise fees by up to 500 per cent,” said Capa’s Kaul.

“Combing these additional levies is likely to have the impact of increasing Delhi-Mumbai airfares by 15-20 per cent, which will affect traffic. Increased airport charges are expected to be progressively introduced at other airports such as Chennai and Kolkata to fund the modernisation programmes,” he added.

http://www.business-standard.com/taketwo/news/kingfisher-struggles-to-fly-outturbulence/479564/

Kingfisher wins more time to stay aloft

INDIA-KINGFISHER-AIRLINES-SBI:Kingfisher wins more time to stay aloft

Embattled Kingfisher Airlines on Thursday won more time from lenders to develop a turnaround plan while its bankers moved ahead with the sale of two properties to recover a small fraction of what they are owed.

Kingfisher, controlled by liquor baron Vijay Mallya, has never made a profit in a struggling Indian airline industry and has seen its domestic market share fall from second to last among the six big carriers after grounding most of its fleet

They will have to come up with concrete steps to improve operations in 15 days, otherwise we will have to take some other actions," said an executive with State Bank of India, which heads a consortium that met the airline on Thursday.

The banker declined to be named or give specifics.

Kingfisher, named after Mallya's flagship beer brand, had debt of $1.4 billion at the end of March, and most of its banks, which are mostly state-run, declared its loans to be in default during the December quarter.

ICICI Bank this week said it unloaded its Kingfisher debt to a fund managed by SREI Infrastructure Finance .

Earlier this week lenders to the carrier, worried it will fall short in its efforts to find a big investor, told Reuters they were considering ways to recover their money including invoking securities and guarantees against their loans.

GRAPHIC on Kingfisher: http://graphics.thomsonreuters.com/12/07/IN_KNGFSHR0712_CC.gif

Another banker at Thursday's meeting, which Mallya did not attend, said little was decided.

"They made a presentation; they need fund infusion. We told them again they need to get equity up-front. We are giving them more time but we can't give them more money," the banker said, also declining to be identified.

Known as the "King of Good Times" for his opulent lifestyle, Mallya owns a Formula One racing team as well as a cricket team and is a member of India's upper house of parliament.

Shares in Kingfisher pared early gains to close 0.42 percent higher on Thursday, in line with the market. They are down 82 percent since the start of 2011, giving it a market value of $147 million.

WARNINGS

The government warned Kingfisher in March that its licence to fly could be cancelled if it fails to adhere to safety norms, which include financial viability.

Kingfisher has been hoping the government follows through on a proposal to allow foreign carriers to own up to 49 percent of Indian airlines, but the plan has been stalled for months.

Kapil Kaul, regional head of the Centre for Asia Pacific Aviation, said Kingfisher needs an immediate equity injection of $500 million.

Kingfisher has scaled back its fleet to 16 planes from 64, stopped flying overseas, and has not paid staff since January.

"Lenders may need an informal political go-ahead to initiate recovery and that stage has not reached. Otherwise, process of recovery would have begun much earlier," Kaul said.

As of the end of March, Kingfisher's controlling shareholders had pledged 90.11 percent of their holding in the airline with lenders, while controlling shareholders of another UB group company, United Spirits , had pledged 94.42 percent of their stake, according to Bombay Stock Exchange data.

"The caution/patience exercised by the lenders is largely because it will have serious consequences for all UB group firms," said Kaul.

SALE OF PROPERTIES

Banks expect to recover about $25 million from the sale of Kingfisher properties in Mumbai and Goa, the SBI executive said.

Kingfisher said last year its loan repayment plan included selling its Mumbai property, Kingfisher House, at an estimated 900 million rupees.

"We told them you have to put these on the block and they have agreed," the SBI executive said, referring to the Mumbai and Goa properties.

In a statement after the meeting, Kingfisher said: "The meeting was scheduled as an update meeting and there was no discussion on commencement of recovery proceedings."

Sharan Lillaney, aviation analyst at Angel Broking, said the move will help Kingfisher reduce its interest burden.

"Maybe if FDI (foreign direct investment) gets approved, and interest rates come down and the debt situation becomes manageable, they can still run the company," he said. "It's an unlikely scenario, but it is still possible."

http://www.business-standard.com/india/news/kingfisher-wins-more-time-to-stay-aloft/177596/on

Banks give Kingfisher 15 days for revival plan

Kingfisher, controlled by liquor baron Vijay Mallya, has never made a profit in a struggling airline industry

Lenders to Kingfisher Airlines have given the beleaguered airline 15 days to come up with "concrete steps" to improve its operations, a senior executive at its lead bank said on Thursday.

Kingfisher, controlled by liquor baron Vijay Mallya, has never made a profit in a struggling airline industry and has seen its domestic market share fall from second to last among the country's six big carriers after grounding most of its fleet

"They have to give us a report on what steps they have taken so far, what challenges they are facing," an executive with State Bank of India said after meetings between the airline and banks on Thursday.

SBI is the leader of a consortium of lenders to Kingfisher, which had $1.4 billion in debt at the end of March.

"They will have to come up with concrete steps to improve operations in 15 days, otherwise we will have to take some other actions," said the banker, who declined to be named or give specifics.

The executive also said banks expected to recover about $25 million from the sale of Kingfisher properties in Mumbai and Goa.

"We told them you have to put these on the block and they have agreed," the SBI executive said, referring to the Mumbai and Goa properties. "There is no point in keeping non-core, unused assets."

He said the proposal to sell the two properties was made about seven to eight months ago.

Kingfisher said in a statement that it is "patently wrong and false to claim or state that banks have started recovery proceedings" and said there was no such discussion at Thursday's meeting.

Kingfisher House in Mumbai has been vacant after staff moved to new offices, the company said.

"At that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today's meeting we raised the issue of this pending approval," it said in a statement.

Earlier this week, bankers said they were losing hope the carrier would be able to bring in an outside investment anytime soon and may sell assets held against their loans.

http://www.business-standard.com/india/news/banks-give-kingfisher-15-days-for-revival-plan/177551/on

Lenders give Kingfisher 15 days to buck up

Kingfisher Airlines was given a 15-day time by its lenders to come up with a plan to improve its operations. The debt-trapped airlines was running a truncated service currently.

This decision was conveyed to the officials of Kingfisher Airlines who met the bankers here on Thursday.

Kingfisher Airlines has a total outstanding debt of around Rs.7,500 crore to a consortium of 17 banks led by State Bank of India (SBI).

SBI (Rs.1,400 crore), Punjab National Bank (around Rs.700 crore) and Bank of Baroda (around Rs.500 crore) are the major lenders. Since launching its operations in 2005, the Airlines has not reported any profit. Bank officials asked the airlines to come up with concrete plans to revive it and “security alone is not enough.” Another lender, ICICI Bank, recently sold its exposure of Rs.450 crore in Kingfisher to Srei Venture Capital Ltd., a group company of Srei Infrastructure Finance Ltd. Meanwhile, Kingfisher Airlines refuted charges that the banks had started recovery process by attaching properties of the airlines. “Kingfisher Airlines would like to clarify that it is patently wrong and false to claim or state that banks have started recovery proceedings after a meeting of the consortium of bankers today,” it said in a press communique.

“The meeting was scheduled as an update meeting and there was no discussion on commencement of recovery proceedings,” it added.

“Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today’s [Thursday’s} meeting we raised the issue of this pending approval,” Kingfisher Airlines explained.

http://www.thehindu.com/business/article3605736.ece

AirAsia, Jetstar Beat Singapore Air, Cathay in Brand Survey

Asia-Pacific budget airlines AirAsia Bhd. (AIRA) and Qantas Airways Ltd. (QAN)’s Jetstar overtook full-service carriers in a brand-reputation survey as more passengers in the region turned to cheaper options amid a global economic slowdown.

Singapore Airlines Ltd. (SIA) and Cathay Pacific Airways Ltd. (293), among the world’s 10 biggest carriers by market value, were ranked below the two low-cost air-travel operators, according to the report compiled by Nielsen Holdings NV (NLSN) and Campaign Asia-Pacific, a marketing industry magazine.

Global airline profits are set to fall in 2012 by more than half to $3 billion from $7.9 billion last year, according to the International Air Transport Association, as recessions in the U.K., Spain and other European countries damp demand and erode gains from lower fuel prices.

“It’s an economic reality,” Therese Glennon, managing director of consumer insights for Asia Pacific, Middle East and Africa at Nielsen, said in an interview yesterday. “As the demand for budget travel increases, as the economic situation deteriorates, you see a lot of these bigger airlines adjusting their business models.”

Nielsen asked 400 respondents in each of 12 Asia-Pacific countries where it conducted the survey to name the top two brands they thought were most trusted or had the best reputation in 14 categories, including travel and leisure, it said.

Shares Rise

AirAsia shares rose 0.3 percent to 3.71 ringgit as of 2:53 p.m. in Kuala Lumpur, set for the highest close in almost five months. Qantas climbed 0.9 percent to A$1.11 in Sydney.

Cathay in May predicted “disappointing” first-half earnings. The company has pared passenger-capacity growth, cut flights to North America and Europe this year, imposed a hiring freeze on ground staff and offered cabin crew unpaid leave.

“While we cannot comment on the validity of this specific survey, being unaware of its exact methodology, we can share that for more than 65 years, Cathay Pacific has been serving travelers from around the world,” the airline said in an e-mailed response to questions.

Singapore Air, which posted an unexpected fourth-quarter loss of S$38.2 million ($30 million), started a low-cost carrier that completed its first flight last month. Nicholas Ionides, a spokesman for Singapore Air, declined to comment because he hasn’t seen the report.

Other full-service airlines that were ranked lower include Qantas, Australia’s largest carrier that forecast last month annual profit may fall as much as 91 percent, and Korean Air Lines Co., South Korea’s biggest flier that slumped to a surprise first-quarter loss.

Samsung Electronics Co. (005930), Apple Inc. and Sony Corp. (6758) were the top three brands in the survey.

http://www.bloomberg.com/news/2012-07-05/airasia-jetstar-beat-singapore-air-cathay-in-brand-survey.html

Bharat Electronics to join hands with Thales Air of France

Bangalore, July 5:

Bharat Electronics (BEL) plans to set up a joint venture company with Thales Air Systems of France. In a release to the exchanges, BEL said the company’s board of directors at a meeting decided to form a joint venture company. The venture — Thales India Private Ltd in radar business area is subject to approval from Union Government and other statutory authorities

http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3607106.ece

Banks give Kingfisher 15 days to come up with revival plan

Airline told to sell non-core assets

Mumbai, July 5:

Banks have told Kingfisher Airlines to come up with a concrete action plan to improve its operations within a fortnight. Currently, the private carrier’s operations are hobbled. Its fleet strength has dropped to 13 from 64 last November.

With the debt-laden airline reportedly defaulting on lease rentals of over Rs 1,000 crore, lessors recently repossessed 34 aircraft.

Bankers say that given its current fleet strength and truncated operations schedule, the beleaguered airline cannot be turned around.

While the airline promoter is banking on the proposed liberalisation in foreign direct investment in the aviation sector, bankers’ patience appears to be wearing thin. Debtor-creditor meetings held so far have not yielded any result.

Small dent in debt

The airline has been asked to put non-core assets — Kingfisher House in Mumbai and the promoter’s villa in Goa — on the block. This will lighten its debt burden, but only a tad.

Pointing out that the airline’s assets will barely cover 10 per cent of the Rs 7,000 crore,it owes a consortium of 17 banks, a senior public sector bank official said if banks precipitate action then the corporate guarantee and promoter guarantee for loans taken could be invoked.

However, the cash-strapped airline, in a statement, said the meeting with the consortium of bankers was scheduled as an “update meeting” and there was “no discussion on commencement of recovery proceedings”.

“Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and even at that time, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset. At today’s meeting, we raised the issue of this pending approval,” the KFA spokesperson said.

Kingfisher House was the airline’s corporate headquarters till it decided to put the building on the block to raise funds. The airline is planning to raise between Rs 90-100 crore selling this building.

Market share

In late-September last year, Mr Vijay Mallya, Chairman of UB Group, said the company had moved into a new building in Mumbai and that Kingfisher House was redundant. “So, we will obviously look to sell it. Any initiative that we can take to reduce our debt is going to be pursued,” he had said then.

KFA saw its domestic market share fall from second to the last in just six months.

Global airline consultancy firm Centre for Asia Pacific Aviation (CAPA) estimates that Kingfisher Airlines has a funding requirement of close to $1 billion, of which $500-600 million is needed immediately. CAPA estimates an additional funding requirement of $300-400 million in the next fiscal.

http://www.thehindubusinessline.com/todays-paper/article3607131.ece