Shares in Kingfisher Airlines gained on Tuesday on reports that the promoters are likely to infuse Rs. 425 crore in the carrier to “partially restart” operations. Kingfisher Airlines, which has yet to submit its revival plan, is likely to resume operations with 21 aircraft, sources told NDTV.
The stock traded 3 per cent higher at Rs 17.37 on the BSE outperforming other airlines such as Jet (up 1.5 per cent to Rs 633) and SpiceJet (up 0.4 per cent to Rs 47.70).
Kingfisher shares locked down in lower circuit, falling by its daily limit of 5 per cent, yesterday on reports that Abu Dhabi's Etihad Airways is likely to sign a deal with Jet Airways and not Kingfisher for a stake.
Lenders to the debt-laden carrier, which met on Monday, have decided to form a small group of bankers to help the airline restart operations, and a part of the Rs. 425 crore infusion will come from the proceeds of the Diageo deal. The banks will not infuse additional money in the carrier.
State Bank of India, Punjab National Bank, Bank of Baroda, IDBI, United Bank and Bank of India will comprise the group that will help in financing the carrier.
The airline was also in talks with foreign investors, sources added, without specifying whether it is an airline or a private equity investor.
Kingfisher, once India's second-largest airline by domestic market share, has been grounded by the aviation regulator for its failure to come up with a viable plan of financial and operational revival after a labour unrest in October led to the airline announcing a lockout. For most of this year, the carrier has struggled to pay its staff. The carrier’s licence is set to expire on December 31.
Kingfisher Airlines has an exposure of Rs. 7,000 crore exposure to a consortium of 17 banks, led by State Bank of India.
With inputs from agencies