Kingfisher Airlines has resumed talks with investors to raise $300 million through global depository receipts (GDR), but did not specify a timeframe for the issue. The company has a debt of about Rs 6,000 crore.
“We had to postpone the GDR issue as fuel prices were going sky high. When we had planned this out, it was on the basis of fuel prices remaining at around $90 per barrel. But the prices have shot up to $120. So, clearly, it had to be postponed. Now, with fuel prices coming down, the investors are engaged with us,” Mr Vijay Mallya, Chairman, Kingfisher Airlines, said on the sidelines of the International Air Transport Association Annual General Meeting here on Monday.
The carrier had planned a GDR issue in December 2010 to reduce its debt but had failed to do so as its stock prices went downward.
MESSAGE FOR INVESTORS
Mr Mallya asked his company's investors to be patient in the backdrop of an improvement in operating profit levels.
“Shareholders will get their returns...you got to wait...This is a capital-intensive business....,” Mr Mallya said, when asked about the returns on the recent funding in Kingfisher by several Indian banks.
Kingfisher Airlines reported an operating (EBITDA) profit of Rs 140 crore in fiscal 2010-11 compared with a loss of Rs 690 crore in 2009-10.
TO LEASE AIRCRAFT
Kingfisher is looking to lease both wide-body and narrow-body aircraft to meet the high growth in domestic demand. The company's own new deliveries will start in about 18 months.
On whether Kingfisher's current capacity was enough to cater to the projected increase in demand, Mr Mallya said: “Not quite, that is why we are looking for leased capacity.”
“Kingfisher, at one time, had several aircraft that were on order from Airbus for delivery in 2010 and 2011. During the 2008-2009 crisis, I actually postponed the delivery of those aircraft to 2012 and 2013,” he said.
TO JOIN ONEWORLD ALLIANCE
Kingfisher will become a fully operational member of the Oneworld Alliance in early 2012, a global airline alliance for business travellers. “The opportunities to leverage this alliance are huge…We see this as being a contributor of about 5-6 per cent of enhanced revenue to us,” he said.