Kingfisher shares gains on report of investment by SC Lowy Financial

NEW DELHI: Shares of Kingfisher Airlines rose over 4 percent in early trade on Thursday after reports that suggested SC Lowy Financial, a Hong Kong-based distressed debt company, was in talks to invest around $280 million in the airline.

Hong Kong's SC Lowy, which specialises in buying into illiquid assets and creating liquidity for them, is in talks with Kingfisher Airlines to help turn around the company.

An ET report stated that Lowy and Kingfisher have been in talks for some time and a deal may happen by the end of the month. The deal to invest in debt-laden Kingfisher could be finalised by the end of the month.

The Vijay Mallya-promoted airline has run out of cash due to rising costs and a fierce price war in the market forcing it to borrow from banks and add to its debt pile of over Rs 7,000 crore. The airline is talking to banks for more money and has sought the government's help to pay creditors, some of whom are threatening to repossess aircraft.

It has not paid some of its pilots for over two months, and 21 of its 60 aircraft are grounded due to dispute with lessors. A deal with SC Lowy could be a lifeline for the airline, helping it pay down some debt, meet statutory obligations and run operations for some months.

At 10:30 a.m., shares of the company were trading 0.8% higher at Rs 25.45. The stock has hit a high of Rs 26.40 and a low of Rs 24.60.