The board of Kingfisher Airlines approved raising Rs 2,000 crore through a rights issue. The decision came after the airline’s attempts to raise $350 million by selling global depository receipts failed to attract investors. The financially-strapped airline, which is in the midst of a debt restructuring, is seeking to raise Rs 2,000 crore, substantially higher than its current market cap of Rs 1,172 crore, which leads to believe that the promoters may not subscribe in proportion to their current holding in the company. If that were to happen, there would be a drastic dilution in the 59% stake held by the promoters. This is not a normal rights issue offer by the company. It is pursuant to a debt recast that was agreed upon by the lenders earlier and is being done under pressure from lenders.
Kingfisher Airlines had raised Rs 709 crore by issuing OCDs to Star Investments, Margosa Consultancy and Redect Consultancy. These entities are acting in ‘consent’ with the promoters and will have to redeem the OCDs before the right issue in one or more tranches. The OCD holders are not group companies or bankers. They are business associates who have confirmed that they are acting in concert with the promoters (UB Group) for this purpose. The board also allowed the three entities that hold OCDs to pick up the unsubscribed portion of the rights issue. Of the promoter holding of just under 59%, as much as 53% is pledged to banks. Kingfisher Airlines has a debt of Rs 6,000 crore on its books. crackcrack
| Company Name | CMP |
|---|---|
| Interglobe Aviation | 4370.50 |
| SpiceJet | 61.60 |
| Global Vectra Helico | 288.05 |
| Taneja Aerospace | 470.90 |
| TAAL Enterprises | 3001.65 |
| View more.. | |
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The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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