Kingfisher Airlines founders may convert Rs1,500 crore of loans into additional equity

The founders of Kingfisher Airlines Ltd may convert Rs1,500 crore they had lent to the airline into additional shares, fulfilling a key demand from banks for more equity infusion, according to a senior executive.

The airline expected the debt conversion as also additional funding from external investors and more loans to help it raise $500-600 million in the next six to eight weeks, chief executive Sanjay Aggarwal said today.

He said the company was in talks with several investors in India and overseas and also the founders who have Rs1,000 crore in loans with the airline and another Rs500 crore in optionally convertible debentures that could be converted into equity.

The carrier's founders include liquor baron Vijay Mallya, United Breweries (Holding) Ltd, Kingfisher Finvest India Ltd and UB Overseas Ltd.

According to Aggarwal, the founders had already converted Rs200 crore worth of debentures into equity. Kingfisher, he added, was also in talks with two Indian investors to sell a total 24 per cent stake to one or both the parties. He did not elaborate on the methods that could be used to sell the stake, or the names of the investors.

Kingfisher's lenders had put their requests for further debt on hold till the airline got some equity investment.