Kingfisher Airlines has received unsolicited offers for investment in the company, according to a top official.
“They have come from domestic sources primarily. And we are in the process of talking to some of them, examining how relevant and serious they are,” Mr Ravi Nedungadi, Chief Financial Officer, UB Group, said on the sidelines of UB's annual general meeting here on Wednesday. “At this point, all I can confirm is that there is more than one serious investor,” he added.
According to him, the company has not decided on how much stake it will offload in the event of an investor coming in. An aviation analyst told
A banker with the consortium pointed out recently that if FDI in aviation is allowed, the airline's cash crunch could be minimised to some extent, adding that the airline was in talks with a few foreign carriers already.
Though Mr Nedungadi refused to comment on this, he said that the company did have long-pending requests with the Government, including FDI. “We are trying to manage with what we can,” he said.
Working capital
Mr Nedungadi also said that the company has asked the 13-bank lending consortium to appraise its working capital needs. “We are asking banks to reappraise and our estimate is that our facilities will go up by an excess of about Rs 600 crore, partly by way of funded facilities,” he explained.
SBI Caps, which the airline had hired to assess its business and recapitalisation needs, had in its recent report pegged the Kingfisher Airlines' working capital requirements at Rs 680 crore.
Mr Nedungadi said that with re-appraisal, the total borrowings of the company could increase 9-10 per cent, adding that in absolute numbers, “Rs 650 crore is significant for the airline”.
The company's short-term funding needs arise primarily because of 40-45 per cent increase in international crude oil prices and rupee depreciation. “A combination of these has affected our operating costs quite a lot,” he said.
Tax dues
On payment of TDS dues, Mr Nedungadi said that the company had already started making payments to tax authorities in instalments. “We recognise that there is a level of interest that would be payable and we have provided for that,” he added.
Mr Nedungadi also said that the airline was not flying all the 66 aircraft, and has in fact grounded 8-9 of them. “They have gone in for technical reasons, but will come out as retrofit,” he explained.