Kingfishers’ stock rises by two percent
November 21st, 2011 - 2:51 pm ICT by IANS
Mumbai, Nov 21 (IANS) The scrip of the Vijay Mallya-led Kingfisher Airlines Monday rose by two percent on the back of news that the government has asked the Life Insurance Corporation (LIC) to consider buying 10 percent stake in the airline.
At the Bombay Stock Exchange (BSE), the company’s stock rose by 2.49 percent to Rs.24.65 in the noon trade. It had earlier touched an intra-day high of Rs.25.
The markets were buoyed by the news of a likely 10 percent stake buyout by LIC, as this will infuse the much-needed capital in the airline whose lenders had also asked the carrier to put in more money for continued support.
On Nov 14, the company’s lenders had asked the airline to come up with more funds for them to consider restructuring of the company’s loans.
“We have asked them to come up with some fresh funds. The thing that is being discussed is selling some of the assets. If they do it, it is good,” State Bank of India managing director Hemant Contractor told reporters on the sidelines of a World Economic Forum (WEF) meet in Mumbai.
“We (banks) have to be satisfied about viability of Kingfisher. There is no point in restructuring (debt), if the company’s operations are not going to be viable,” Contractor added.
The SBI leads the consortium of 13 banks which has lent to the airline. SBI is also the biggest lender to Kingfisher with loans of Rs.1,500 crore. Private lender ICICI Bank has also given loans of up to Rs.400 crore to the company.
The development comes even as the carrier continues to curtail 50 flights daily since Nov 8 as it has been hit by technical and labour issues.
The concerns on airline’s viability has been in the news since it started curtailing flights with its stock falling over 19 percent in the early trade of Nov 11 to a new low of Rs.17.55. It later managed to crawl up but was still ruling with a 12.44 percent loss at Rs.19 in noon trade.
Currently, the airline owes huge amounts to oil companies, the Airports Authority of India and private airport operators GVK and GMR groups. The airline has not posted any profit since its launch five years ago and reported a net loss of Rs.1,027 crore last fiscal and Rs.263 crore in the last quarter.
- Kingfisher Q2 losses at Rs.468 crore, board to meet again - Nov 15, 2011
- Kingfisher board to chalk out rescue plan - Nov 14, 2011
- SBI stock plunges on talk of loan to Kingfisher - Feb 22, 2012
- Kingfisher cuts flights to fend off debt, banks plan lifeline (Roundup) - Feb 22, 2012
- Banks seek more details on Kingfisher's operations - Nov 13, 2011
- Will not close down Kingfisher due to losses: Ajit Singh - Feb 29, 2012
- Fears on Kingfisher's viability grow, seeks government help - Nov 11, 2011
- Kingfisher Airlines no longer UB subsidiary - May 10, 2012
- Kingfisher Airlines' board approves Rs.2,000 crore rights issue - Aug 26, 2011
- Unfair to write Kingfisher's epitaph: Mallya (Lead) - Nov 15, 2011
- Mallya defends Kingfisher, more flights axed; PM to meet Ravi on issue - Nov 12, 2011
- Kingfisher cancels 20 flights, passengers take the hit - Feb 22, 2012
- Indian markets dip on profit booking (Lead) - Feb 22, 2012
- Air India board approves issue of preferential shares to lenders - Dec 29, 2011
- No bailout for Kingfisher, Air India needs to shape up: Minister - Jan 11, 2012
Tags: bank of india, bombay stock exchange, kingfisher, kingfishers, labour issues, lenders, life insurance corporation, managing director, oil companies, percent stake, private lender, rs 1, sbi, scrip, sidelines, state bank, state bank of india, viability, vijay, world economic forum