Thursday, September 30, 2010

Kingfisher to launch $250 million GDR issue

Kingfisher Airlines would launch a $250-million GDR issue shortly, and is also in the process of restructuring of its debt with a consortium of bankers, Chairman Vijay Mallya said today.

Speaking at the annual general meeting and later addressing reporters, the UB Group Chairman Mallya said the debt recast is expected to be completed in the "next month or so," which would be immediately followed by the GDR issue.

Stating that RBI has sanctioned the debt restructuring plan, he said the Airlines is currently working with the consortium of banks on recasting the entire debt.

"In broad terms, about 30 per cent of the total debt would be converted by banks into capital," Mallya said, adding, the UB Holdings which held its AGM earlier today, passed a resolution to convert Rs 735 crore of loans also into capital.

"There would be an interest reduction to an average of 11 per cent," he said. The Airlines would now have to make the repayment over a period of nine years, with a two-year moratorium.

Mallya added that the debt restructuring package also calls for Rs 900 crore of additional facility to be provided by the banks to the Airlines.

Once the debt restructuring exercise is completed, Kingfisher would immediately launch the $250 million GDR issue. "....We are completely committed to fund-raising (GDR issue) immediately after the bank restructure is over".

"...We are going to be in the US next week with some preliminary road-shows. We have already met a whole bunch of investors in the US, Europe, Hong Kong and Singapore...All of whom have expressed strong interest in investing in Kingfisher", Mallya said.

He said Kingfisher is now casting its net "further and wider" to make sure that when it launches the issue, there is sufficient investor interest to subscribe to it.

Clearly, Kingfisher has a clearcut direction and financial road-map which is it's working on, he said.

On alteration of debt-equity ratio after the debt recast exercise and GDR issue, Mallya noted that it depends on the price at which Kingfisher issued the shares.

Source: Business Standard


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