Both lenders and promoters of Kingfisher Airlines will pick up equity in the debt-laden airlines at a substantial 64% premium to its current market price by March 31 if the company keeps its commitment on timelines earlier agreed upon. However, the company is yet to decide the date and share conversion price based on SEBI formula.
If this plan goes ahead, all the 18 lenders will own over 12 crore shares of the airline, which could be around 19% of the expanded equity base, without considering further equity dilution via the proposed GDR issue. However, the only catch is that all these banks would have to report mark-to-market losses and accordingly make provisions for it since the stock will be trading at a discount to its acquisition price.
At the end of the third quarter, 66.27% shares in Kingfisher Airlines were held by the promoter group (with UB holdings having 30.57% stake). Kingfisher plans to reduce its debt to Rs 6,000 crore from Rs 7,650 crore after the restructuring exercise.
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