Kingfisher to consider cutting debt: Report

Kingfisher to consider cutting debt: Report

Mumbai: The board of cash-strapped Kingfisher Airlines will consider on Monday a proposal to cut its about $1.3 billion debt by more than half by selling property, converting loans from its parent company into equity and changing the terms under which it leases aircraft, the Economic Times reported.

It said State Bank of India, the lead lender in a 13-bank consortium, and other banks had asked the carrier’s owners to inject 8 billion rupees ($160 million) in equity.

“Kingfisher is a valued company, but an airline would need fuel, fleet and finance to run the show. Kingfisher should tell us how it plans to streamline its daily requirements," the paper quoted State Bank chairman Pratip Chaudhuri as saying.

The newspaper said Kingfisher would approach banks for up to Rs500 crore of working capital to buy fuel and pay salaries, citing unnamed people familiar with the development.

Kingfisher chief executive Sanjay Aggarwal refused to comment on the additional working capital, but confirmed the airline was planning to raise funds by changing the nature of lease agreements and selling real estate, the paper said.

“All this exercise is going to reduce our interest costs that are pinching us a lot right now and reduce debt levels to reasonable limit," it quoted him as saying.

A Kingfisher Airline spokesman could not be immediately reached for a comment by Reuters.