Mallya’s stake in Kingfisher to fall below 50% post debt restructuring

Vijay Mallya’s stake in Kingfisher Airlines may fall below 50% after the debt restructuring is completed.

Kingfisher Airlines is in the process of implementing the debt restructuring plan, which also includes raising $250 mn to $350 mn via GDR.

Kingfisher Airlines has also zeroed on the Luxembourg stock exchange for the GDR listing and it would happen by the end of January, according to sources familiar with the debt restructuring plan.

"The GDR price has still not been finalized, but considering the promoters will be infusing fresh equity in the company, the promoters' stake will fall below 50%," said the source.

Kingfisher's loan funds have further increased to Rs 8,157 crore, as on September 2010, from Rs 7,926 crore in March 2010. The plan's broad contours include interest rate reduction to around 11 per cent from 12-12.5 per cent, moratorium period of two years and extended loan tenure of nine years.

The Reserve Bank of India had cleared the debt restructuring proposal in September.

Kingfisher, controlled by United Breweries Holdings, will convert lenders' loans of up to Rs 1,355 crore into shares. It also plans to convert founders' debt of up to Rs 648 crore into share capital. The airline plans to issue convertible and redeemable shares to lending banks as well as founder entities in line with its debt recast plan.