Kingfisher denies report of stake sale to Etihad
Debt-laden Kingfisher AirlinesBSE 4.96 %has denied a newspaper report that it had reached an agreement on selling a 48 percent stake to Etihad Airways.
KingfisherBSE 4.96 % is in discussion with various investors, including Etihad, for equity investments in the company, but matters are merely at negotiation stages, it said in a statement to the stock exchange.
India changed its Foreign Direct Investment ( FDI) policy in September to allow foreign carriers to buy stakes of up to 49 percent in domestic airlines, a move seen as a potential boon for its struggling domestic aviation sector.
The newspaper report said Etihad, which was also in talks with Jet, has agreed to pick up a 48 per cent stake in Kingfisher for a little over Rs 3,000 crore.
The report added that the deal's official announcement is likely to come around December 18, Mallya's 57th birthday, when he has organised a big bash at his sea-side Kingfisher Villa in Goa.
Etihad this year has already bought into three international airlines -- Virgin Australia, Germany's Air Berlin and a 40 per cent stake in Air Seychelles.
Source : ET
Kingfisher Airlines to sell 48% stake sale to Etihad Airways for over Rs 3,000 crore
The king of good times, who has had a miserable 2012, is all set to give himself a big birthday gift before the year ends. Vijay Mallya's KingfisherBSE 4.96 %Airlines, grounded for over a month and a half now for want of cash, has finally found a saviour in United Arab Emirates national carrier Etihad Airways. Etihad, which was also in talks with Jet, has agreed to pick up a 48 per cent stake in Kingfisher for a little over Rs 3,000 crore.
At 10:03 AM shares in Kingfisher AirlinesBSE 4.96 %were trading at Rs 15.67, up 4.96% on the Bombay Stock Exchange.
The deal's official announcement is likely to come around December 18, Mallya's 57th birthday, when he has organised a big bash at his sea-side Kingfisher Villa in Goa. The deal, sources in the two airlines say, will be closed in two installments. Etihad will buy a 30 per cent stake this month and another 18 per cent by August next year.
Both Etihad and Kingfisher late Monday evening refused to confirm or deny the stake sale.
"I have no comments to offer on any speculation ," Ravi Nedungadi, CFO, UB Group, said. In an e-mail response to a specific question on whether the deal had been closed, Etihad wrote, "Etihad Airways has identified equity investments in other airlines as an important evolution of its successful partnership strategy. Such investments will be made where Etihad Airways believes the commercial prospects are strong, where there are like-minded business philosophies, and where such commitment will be welcomed."
Etihad this year has already bought into three international airlines -- Virgin Australia, Germany's Air Berlin and a 40 per cent stake in Air Seychelles. Senior Etihad officials are said to have visited the Kingfisher offices across India in the past couple of weeks. In the first week of September, a team comprising members of its commercial and operations teams met with their counterparts in Kingfisher. In October, top Kingfisher and Etihad officials met twice in Abu Dhabi. The deal, sources said, was cracked last week in Abu Dhabi.
According to industry sources, Kingfisher requires a minimum of Rs 3000 crore to fly again. It owes Rs 60-70 crore in salaries to employees , Rs 950 crore to oil companies, Rs 500 crore to airports and Rs 7,000 crore to a consortium of 17 banks led by the State Bank of IndiaBSE -0.68 %.
Once Etihad infuses Rs 3,000 crore into the airline and brings to the table its own standing in the market, banks are likely to offer fresh loans to the troubled airline. Kingfisher's last request for a loan of Rs 4,000 crore was denied by the consortium of banks. Post the stake sale to Etihad, the loan is likely to be cleared.
While on Thursday last week, the airline paid its employees salaries for May, it also extended its flights cancellation from December 15, 2012 to January 15, 2013, airlines sources said. Experts say a month is the minimum the airline will take to relaunch operations after it gets its suspended licence back. Union Civil Aviation Minister Ajit Singh, however, remained circumspect.
"The airline had been saying for a very long time that they will have a revival plan in place soon, but we have not received any such plan yet. It is the Director General of Civil Aviation which will decide Kingfisher's future if a satisfactory plan is received." He, however, added, "If they have got an investor, it is good news."
Source :Aditya Anand and Bipin Kumar Singh,ET
Debt-laden Kingfisher Airlines has denied a newspaper report that it had reached an agreement on selling a 48 percent stake to Etihad Airways.
Debt-laden Kingfisher AirlinesBSE 4.96 %has denied a newspaper report that it had reached an agreement on selling a 48 percent stake to Etihad Airways.
KingfisherBSE 4.96 % is in discussion with various investors, including Etihad, for equity investments in the company, but matters are merely at negotiation stages, it said in a statement to the stock exchange.
India changed its Foreign Direct Investment ( FDI) policy in September to allow foreign carriers to buy stakes of up to 49 percent in domestic airlines, a move seen as a potential boon for its struggling domestic aviation sector.
The newspaper report said Etihad, which was also in talks with Jet, has agreed to pick up a 48 per cent stake in Kingfisher for a little over Rs 3,000 crore.
The report added that the deal's official announcement is likely to come around December 18, Mallya's 57th birthday, when he has organised a big bash at his sea-side Kingfisher Villa in Goa.
Etihad this year has already bought into three international airlines -- Virgin Australia, Germany's Air Berlin and a 40 per cent stake in Air Seychelles.
Source : ET
Kingfisher Airlines to sell 48% stake sale to Etihad Airways for over Rs 3,000 crore
The king of good times, who has had a miserable 2012, is all set to give himself a big birthday gift before the year ends. Vijay Mallya's KingfisherBSE 4.96 %Airlines, grounded for over a month and a half now for want of cash, has finally found a saviour in United Arab Emirates national carrier Etihad Airways. Etihad, which was also in talks with Jet, has agreed to pick up a 48 per cent stake in Kingfisher for a little over Rs 3,000 crore.
At 10:03 AM shares in Kingfisher AirlinesBSE 4.96 %were trading at Rs 15.67, up 4.96% on the Bombay Stock Exchange.
The deal's official announcement is likely to come around December 18, Mallya's 57th birthday, when he has organised a big bash at his sea-side Kingfisher Villa in Goa. The deal, sources in the two airlines say, will be closed in two installments. Etihad will buy a 30 per cent stake this month and another 18 per cent by August next year.
Both Etihad and Kingfisher late Monday evening refused to confirm or deny the stake sale.
"I have no comments to offer on any speculation ," Ravi Nedungadi, CFO, UB Group, said. In an e-mail response to a specific question on whether the deal had been closed, Etihad wrote, "Etihad Airways has identified equity investments in other airlines as an important evolution of its successful partnership strategy. Such investments will be made where Etihad Airways believes the commercial prospects are strong, where there are like-minded business philosophies, and where such commitment will be welcomed."
Etihad this year has already bought into three international airlines -- Virgin Australia, Germany's Air Berlin and a 40 per cent stake in Air Seychelles. Senior Etihad officials are said to have visited the Kingfisher offices across India in the past couple of weeks. In the first week of September, a team comprising members of its commercial and operations teams met with their counterparts in Kingfisher. In October, top Kingfisher and Etihad officials met twice in Abu Dhabi. The deal, sources said, was cracked last week in Abu Dhabi.
According to industry sources, Kingfisher requires a minimum of Rs 3000 crore to fly again. It owes Rs 60-70 crore in salaries to employees , Rs 950 crore to oil companies, Rs 500 crore to airports and Rs 7,000 crore to a consortium of 17 banks led by the State Bank of IndiaBSE -0.68 %.
Once Etihad infuses Rs 3,000 crore into the airline and brings to the table its own standing in the market, banks are likely to offer fresh loans to the troubled airline. Kingfisher's last request for a loan of Rs 4,000 crore was denied by the consortium of banks. Post the stake sale to Etihad, the loan is likely to be cleared.
While on Thursday last week, the airline paid its employees salaries for May, it also extended its flights cancellation from December 15, 2012 to January 15, 2013, airlines sources said. Experts say a month is the minimum the airline will take to relaunch operations after it gets its suspended licence back. Union Civil Aviation Minister Ajit Singh, however, remained circumspect.
"The airline had been saying for a very long time that they will have a revival plan in place soon, but we have not received any such plan yet. It is the Director General of Civil Aviation which will decide Kingfisher's future if a satisfactory plan is received." He, however, added, "If they have got an investor, it is good news."
Source :Aditya Anand and Bipin Kumar Singh,ET
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