As KFA losses exceed net worth, lenders get Mallya guarantee

The accumulated losses of the ailing Kingfisher Airlines were more than 50% of its net worth at the end of the financial year 2012, the company has said in its 2011-12 annual report, HT reports.

The accumulated losses of the ailing Kingfisher Airlines (KFA) were more than 50% of its net worth at the end of the financial year 2012, the company has said in its 2011-12 annual report.

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KFA chairman, Vijay Mallya, has reportedly given guarantees worth Rs 5,904 crore for the carrier's loans and other liabilities in 2011-12.

While guarantees given by Mallya fell from Rs. 6,156 crore in the previous year 2010-11, the guarantees provided by KFA's holding and associate companies rose from Rs. 8,863 crore to Rs. 8,926 crore in this period, PTI reported.

KFA, the report said, was operating as a "holding pattern" with limited operation, pending policy changes that are in the offing.

"The company has incurred cash losses during the financial year and in the immediately preceding financial year," the company said in its annual report.

"The company has incurred substantial losses and its net worth has been eroded."

KFA's total long-term borrowings stood at Rs. 5,695 crore as on March 31, 2012, down from Rs. 6,306 crore a year ago.

KFA operated 67 aircraft up to November 2011, 13 of which were owned through finance leases and 54 are held under operating leases.

Since November 2011, till the end of the financial year, the company returned 16 aircraft and the fleet as on March 31, 2012 was 55 aircraft.