Kingfisher imposes ownership cap to make room for investor

Tags: News
Kingfisher Airlines Ltd, in stake sale talks with Abu Dhabi's Etihad Airways and other investors, has capped foreign portfolio investment in the company at 3 percent, carving space for a foreign investor to buy as much as 46 percent of the embattled carrier.

India allows foreign investment of up to 49 percent in local carriers. Overseas institutional investors currently hold 2.46 percent of Kingfisher, according to stock exchange data.

Cash- and debt-strapped Kingfisher, which was once India's No. 2 airline by domestic market share but has grounded its fleet since the start of October, said earlier this week it was in talks with Etihad Airways and other investors about taking a stake.

The decision to limit FII investment was taken "with a view to keeping the company's capital structure in readiness for transactions that may be identified in the future for the benefit of all stakeholders of the company," Kingfisher said in a statement on Thursday.

Kingfisher, controlled by liquor tycoon Vijay Mallya, has been trying for more than a year to find an investor, without success. It is saddled with $2.5 billion in debt, according to one estimate.

A fresh cash infusion into the struggling carrier could come from a financial or strategic, Indian or non-resident investor, Kingfisher said on Thursday.

Shares of the company have rallied recently and were up 5 percent - their daily limit - for the third consecutive day on Thursday. The shares, which were trading at 17.15 rupees in early trade, have recovered sharply from their all-time low of 7.05 rupees hit in August.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The budget is sound in logic; the market is too clever by half

    For a man derided by former finance minister P Chidambaram for his knowledge of economics as only sufficient to be scribbled on the back of a postage

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Why higher education needs innovation

India is such a great country that it creates complexity ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture