Kingfisher Airlines submits revival plan stock gains
Financially stretched Kingfisher Airlines today submitted its revival plans to the aviation regulator which had cancelled its flying licence over safety concerns.india Updated: Dec 24, 2012 16:02 IST
Financially stretched Kingfisher Airlines on Monday submitted its revival plans to the aviation regulator which had cancelled its flying licence over safety concerns.
"They (Kingfisher Airlines) submitted their revival plans to the director general of civil aviation (DGCA) in a meeting held today (Monday)," a civil aviation ministry source said.
The company, however, refused to comment on the development.
The aviation regulator on October 20 suspended the operating licence of the airlines, citing the passenger carrier's inability to provide any reasonable revival plans.
The airline was then asked to prepare a credible revival plan and present it to the DGCA, which will take a final call on restoring the airline's operating licence.
The regulator had also rejected the carrier's winter schedules for flight departures. The airline last year had a departure rate of 2,930 flights per week, but has since reduced capacity due to mounting debt and an exodus of employees.
The airline is desperately trying to stay afloat and wants to restart operations which were crippled since October 1 by an employees' strike, a lockout and suspension of its flying licence.
The development is also seen in the light of an impending license renewal that was supposed to have taken place on December 31. The airline is also trying to woo potential investors.
Last week, the airline said it will restart operations in a phased manner. However, it did not give any time line for it.
"We will restart in a phased manner and will provide funding ourselves. We have not asked the banks for any support," the company said in a statement after a meeting with lenders in Mumbai.
"We have also shared a full recapitalisation plan which will be further discussed with a small designated group of bankers," the company said.
The airline has a total debt of Rs. 7,000 crore from a consortium of banks.
The airline is also trying to woo foreign investors by putting up nearly 46% of the permitted 49% stake in the company for sale. The rest 3% will remain with foreign institutional investors, qualified foreign investors or other non-strategic foreign investment.
Informed sources say that the airline will first take regulatory approvals to restart operations and give near complete control of its decision making to the potential investor.
Kingfisher is also said to be in talks with Middle East-based airlines for a possible stake sale to come out of its troubled financial position, sources said.
The news of Kingfisher Airlines submitting its revival plans helped the company's scrip at the Bombay Stock Exchange to hit its circuit limit of Rs. 15.97 per share from its previous close of Rs. 15.21 per share on Friday. The scrip moved up 0.76 points or 5%.