Kingfisher Airlines caps FII holding at 3%
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Kingfisher Airlines caps FII holding at 3%

Last Updated: Thursday, December 13, 2012, 19:52
 
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Kingfisher Airlines caps FII holding at 3%
Mumbai: Debt-laden Kingfisher Airlines, which is in talks with various investors for equity infusion, has capped the FII investment limit at 3 percent, a move to help facilitate foreign direct investment into the carrier.

The Vijay Mallya-led carrier, which is currently grounded, today said it has imposed FII cap, with a "view to keep the company's capital structure in readiness for transactions that may be identified in the future for benefit of all stakeholders".

In a BSE filing, Kingfisher said with immediate effect no FII, qualified foreign investor or other non-strategic foreign investment (excluding investment by NRI) shall be "permitted beyond its current level of three percent or such other percentage that may be decided from time to time under intimation to the stock exchanges".

A resolution in this regard was passed at its board meeting held on December 12.

At the end of the September quarter, overseas investors held 2.46 percent stake in Kingfisher. Foreign Direct Investment (FDI) in domestic carriers is currently capped at 49 percent.

Extending its rally for the eighth consecutive day, shares of the company jumped 5 percent to touch an upper circuit limit of Rs 17.27 on the BSE.

According to the filing, the Board of Directors of the company has been deliberating various alternatives to improve the financial position in the best interest of all stakeholders.

"In this connection, it has been advised that a fresh infusion of capital by a financial or strategic, Indian or non-resident investor is a possible alternative," it said.

Regarding the FII limit, Kingfisher said appropriate steps are being undertaken to intimate the RBI and to seek consequent measures and any other approvals that may be considered necessary to give full effect to this decision.

On Tuesday, Kingfisher had said it was in "discussions with various investors, including Etihad Airways, for equity investments". The carrier's statement came in response to reports that it was to ink a deal for offloading 48 percent stake.

"However, no agreement has been reached either with Etihad or any other airline and the matters are merely at negotiation stages," Kingfisher had said.

Coupled with tax arrears and vendor dues, the airline has over Rs 10,000 crore in accumulated losses, besides Rs 7,000 crore it owes to 17 banks, which the company has not serviced since January.

PTI



First Published: Thursday, December 13, 2012, 14:24


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