Thursday, March 1, 2012

Day 246


Since a week, I was trying to write something about the beleaguered Kingfisher airlines. But somehow, I was having other issues to write upon. There is a long list of worries to Mr Vijay Mallya about running the airlines. State Bank of India, the primary lender to the Kingfisher airlines, has clearly stated that the bank will not consider any fresh loan for the cash stripped airline. Now the airline has to raise more equity in the stock market. But I think that will not help the Kingfisher much as the share prices of the airline is moving downwards. Kingfisher airline was incepted in 2005 and since then it’s carrying a debt of $1.3 million. Now the airline has asked fresh loan to the bank of Rs 200-300 million again to run its day to day operations. But the bank is refusing it in the clear way as the airline hasn’t paid its previous debt.
Multiple flight cancellations and resignation of about dozen of the pilots has added more worries for the cash strapped airlines. The bank want the airline to pump Rs 1500 crore equity because the bank has already given Rs 3000 crore to the airlines in past 12 months. Now no other lender is providing any fresh financial assistance to the Kingfisher airlines. The share price of Kingfisher has dropped to Rs 25.05 on last Friday in the BSE. Other banks who have given loan to the Kingfisher airlines has set aside Rs 1000 crore due to the non payment from the Kingfisher. Due to this reason, none of them are in mood to provide any fresh assistant to the airlines. If we believe the report of Centre for Asia Pacific Aviation, Kingfisher requires another Rs 4000 crore or $ 800 million in the next 12-18 months to run its business and return to the business.

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