Shares of Kingfisher Airlines surged as much as five per cent on the bourses in the afternoon trade today after its group holding firm United Breweries Holdings hiked its loan limit for the ailing carrier to Rs 750 crore from Rs 300 crore.

UB Holdings has sought approval from its shareholders to revise the lending limit for Kingfisher and to authorise its board of directors to take necessary actions in this regard, the company had said yesterday.

Reacting to the development, the company shares opened on a bullish note and then gained further ground to touch an intra-day high of Rs 10.53 on the BSE, higher by 5 per cent from their previous closing price.

A similar movement was witnessed on the National Stock Exchange, where the stock gained 5 per cent and hit the upper circuit limit at Rs 10.50.

“To accommodate further lending to Kingfisher Airlines if required, it is proposed to realign these limits further by increasing the lending limit to KFA from Rs 300 crore to Rs 750 crore and reducing the investment limit from Rs 1,200 crore to Rs 750 crore, thus maintaining the overall limit of Rs 1,500 crore...,” UB Holdings said in a shareholders’ notice.

The revision was done to facilitate the conversion of loans given to Kingfisher into convertible/no-convertible securities, as required by the debt recast agreement between the airline and a consortium of its lenders.

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