Kingfisher Airlines to raise $600 million to retire debt

According to Kingfisher Airlines, chairman Vijay Mallya, the carrier will raise $600 million to pay off part of its debt.

Kingfisher Airlines is in talks with several private equity (PE) firms to conclude a $400 million deal and also intends to raise $200 million, $100 million each through rights shares and global depository receipts (GDRs), Mallya told the media on the sidelines of India Economic Summit.

He said the company was in talks with private equity players to raise $400 million and has also taken approval of shareholders to raise $100 million through rights issue and $100 million through GDRs. He added that the funds would go towards retirement of debt.

Kingfisher is in the red to the extent of $140 million in the first half of 2009-10 due to high jet fuel prices.

Mallya said the process of raising the required funds would be completed within the present financial year. He added that Kingfisher would soon start services to international destinations for which the carrier has already received the necessary government approvals.

He said the company was making better use of narrow-body aircraft with extension of flights to neighbouring countries for which it has applied to the government. He added that in certain cases, the airline is awaiting permission while in some other cases, it has received the permission and will be starting operations.