Mumbai: With Kingfisher Airlines' near-bankruptcy becoming a national issue, reports now suggest that the embattled carrier will propose to its board Monday that it will cut debt by more than half by selling property, converting loans from its parent company into equity, and changing aircraft leasing terms.
According to reports, airline management feels its plan will result in debt coming down from Rs6,500 crore to Rs3,000 crore.
Apparently, these plans were earlier presented to potential financial investors on 6 November.
The management is likely to propose a preferential issue of equity to promoters and other investors. This proposal may meet a key demand of banks that want owner Vijay Mallya to infuse equity into the troubled carrier.
Mallya's UB Group is also likely to convert Rs675 crore of debt into equity as part of the plan to pare debt.
Kingfisher is promoted by Mallya's UB Group.