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Options before Kingfisher Airlines

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  • IATA- International Air Transport AssociationSOP- Scheduled Operator’s Permit (Flying license)
  • Last restructure done in January 2011.Then debt was 8,000 croreConsortium of 18 lenders agreed to-Interest rates cut (down to 11%, saving 500 crore per year)Converting 1400 crore of debt into preference shares (which will be converted into equity shares when the airline lists on the Luxembourg Stock Exchange by selling Global Depositary Receipts- GDRs)KFA expected to raise about $300 mil through GDR issue.
  • DGCA Flying license suspensionOneword International Alliance membership on hold
  • 15 left to operate flights, of which it owns just 10SBI Chairman PratipChaudhari spoke of giving Kingfisher 2 months to revive, before liquidating the pledged securities. He also quoted that all possible invesros will walk away if they pull the plug now

Options before Kingfisher Airlines Options before Kingfisher Airlines Presentation Transcript

  •  Facing losses since its inception, in 2005 “A loss-making company acquiring another loss-making company”- Kingfisher acquires Air Deccan Airline suspended from IATA IT Dept. freezes Kingfisher Airline’s bank a/c’s Delay in payment of salaries to staff DGCA suspends SOP of Kingfisher Airlines
  •  Current market cap- Rs. 1,018 crore Debt- 7,500 crore+ 95% of Dr. Mallya’s shareholdings pledged to lenders
  • CRITERIA BEFORE NOWFleet size 63 11Market share 2 6positionLoss (Rs.) 1000 Cr. 7000 Cr.Share Price (BSE) 335(2008 peak) 12.60(Rs.) View slide
  •  Last recast in January 2011 Options for CDR- 1) Dr. Mallya stays on board + UB Group invests + Banks recast loans 2) Banks take over the Airlines’ control + appoints new board 3) Government mediation after court order(ex. Satyam) View slide
  •  49% FDI in civil aviation sector Possible parties- Qatar Airways, Etihad (Abu Dhabi) Political uncertainty Foreign players skeptical Long process (possibly over a year)- by when Kingfisher could possibly be beyond revival May result in distressed sale
  •  Ultimate option for banks’ consortium to cut losses Options for liquidation-1) Auction- Company put up for sale (incl. debts) ex. Satyam2) Sale of individual assets like planes, realty etc. (ex. Lessors have taken back 34 planes, airline left with 15 top operate flights)
  • Presenting Members-1. Abhilash Kumar2. Disha Agarwal16. Vishal Garje27. Kaustubh Kokane29. Anup Kumbharikar33. Navya Sindhu44. Pooja Patil53. Pranav Atrey Sharma55. Vinutha Shetty59. Shripad Telang