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Kingfisher Airlines' founder companies, United Breweries (Holdings) Ltd and Kingfisher Finvest Ltd, have pledged their entire stake in the airline to its lenders as part of the requirement prescribed under the Debt Recast Package of the airline.
In a statement to the BSE on Wednesday, the airline said that United Breweries (Holdings) Ltd pledged 113.2 million shares while Kingfisher Finvest India pledged 2.3 million shares.
With this transaction United Breweries (Holdings) Ltd has pledged 199.6 million shares, or 40.1 per cent of Kingfisher Air's total outstanding shares while Kingfisher Finvest has pledged 63.5 million shares amounting to 12.75 per cent the outstanding shares.
The two companies have thus pledged their entire stake in Kingfisher Airlines.
Earlier this year, Kingfisher implemented a debt recast plan that entailed conversion of 30 per cent of its debt into shares. The shares were issued to its lenders and founder companies, and restructuring the rest to a longer tenure.
The recast helped the airline to cut the debt on its books to Rs 6,007 crore from Rs 7,651 crore last year. While promoters holding stood at 58.61 per cent, FIIs have 2.89 per cent stake in the company and domestic institutional investors 24.12 per cent, according June quarter shareholding pattern. Major stakeholders include SBI (5.68 per cent), ICICI Bank (5.3 per cent), IDBI Bank (3.51 per cent), Bank of India (1.75 per cent), Uco Bank 1.4 per cent stake and Punjab National Bank (1.14 per cent).
“Since the shares have been pledged to the lenders, most of whom are banks, they might not immediately go in for liquidating the shares if the Kingfisher Airlines stock prices fall a little. They will most likely hold on to it like a collateral,” said Mr Arun Kejriwal, Founder KRIS Research. He added that if the shares keep falling Kingfisher Airlines would need to give more of its assets as collateral. “Their planes might need to be hypothicated in favour of the banks,” he said.
Spicejet pledging
It may be recalled, that the promoters of other airline major SpiceJet have also recently pledged about 13 per cent of their shares with the lenders, after the stock tumbled sharply. Kal Airways now pledged about 58 per cent of it stake in the company. Kal Airways holds over 38 per cent in SpiceJet.
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