Mallya come up with revival plan for Kingfisher, shares up



Shares of  Kingfisher Airlines saw an increase of around 9 percent today after a letter sent to employees from Chairman Vijay Mallya highlighted plans for a revival to be funded with 6.5 billion rupees from his UB Group.

Kingfisher, which lost its operating licence  in the December last year has not flown since the beginning of October, filed its plan, which consists of the identical funding amount from UB, to regulators in late December.

Kingfisher, once India’s second-biggest airline, is estimated to owe $2.5 billion in debt to banks, employees, vendors and others. The airline has tried unsuccessfully for a period of more than a year to rope in new investors.


In his letter to employees today, Mallya said the airline had submitted a comprehensive strategy to the industry regulator to restart operations using seven planes by the beginning of the summer, increasing to 21 planes in a period of four months.

The second stage of the strategy would see it expand to 57 planes within an year of a recapitalisation, Mallya said.

“All challenges, like the license cancellation, (are) known. Any revival plan would be good for shareholders,” pointed out Deven Choksey, managing director of broker K.R. Choksey.

 

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