Kingfisher imposes FII cap to make room for investor

NEW DELHI Thu Dec 13, 2012 12:40pm IST

Women walk past a closed booking office of Kingfisher Airlines in New Delhi October 1, 2012. REUTERS/Mansi Thapliyal/Files

Women walk past a closed booking office of Kingfisher Airlines in New Delhi October 1, 2012.

Credit: Reuters/Mansi Thapliyal/Files

Stocks

   

NEW DELHI (Reuters) - Kingfisher Airlines Ltd(KING.NS), in stake sale talks with Abu Dhabi's Etihad Airways and other investors, has capped foreign portfolio investment in the company at 3 percent, carving space for a foreign investor to buy as much as 46 percent of the embattled carrier.

India allows foreign investment of up to 49 percent in local carriers. Overseas institutional investors currently hold 2.46 percent of Kingfisher, according to stock exchange data.

Cash- and debt-strapped Kingfisher, which was once India's No. 2 airline by domestic market share but has grounded its fleet since the start of October, said earlier this week it was in talks with Etihad Airways and other investors about taking a stake.

The decision to limit FII investment was taken "with a view to keeping the company's capital structure in readiness for transactions that may be identified in the future for the benefit of all stakeholders of the company," Kingfisher said in a statement on Thursday.

Kingfisher, controlled by liquor tycoon Vijay Mallya, has been trying for more than a year to find an investor, without success. It is saddled with $2.5 billion in debt, according to one estimate.

A fresh cash infusion into the struggling carrier could come from a financial or strategic, Indian or non-resident investor, Kingfisher said on Thursday.

Shares of the company have rallied recently and were up 5 percent - their daily limit - for the third consecutive day on Thursday. The shares, which were trading at 17.15 rupees in early trade, have recovered sharply from their all-time low of 7.05 rupees hit in August.

(Reporting by Anurag Kotoky; Editing by Chris Gallagher)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

RBI Policy Review

RBI Policy Review

RBI keeps rates on hold, warns on inflation  Full Article 

China iPhone Sale

China iPhone Sale

China regulator approves Apple's iPhone 6 for sale in China  Full Article 

Cleanliness Drive

Cleanliness Drive

Modi orders officials to clean loos on Gandhi's birthday.  Full Article 

Bid to Boost Trading

Bid to Boost Trading

RBI takes small steps to deepen markets.  Full Article 

Car Recall

Car Recall

Maruti Suzuki says to recall 69,555 cars.  Full Article 

China Factory Data

China Factory Data

China final HSBC PMI steady in September on stronger global demand but risks remain  Full Article 

Oil Demand

Oil Demand

India's thirst for oil grows even as China cuts back  Video 

EBay Divests PayPal

EBay Divests PayPal

EBay to spinoff PayPal in 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage