Mallya outlines revival plan for Kingfisher, shares surge
MUMBAI (Reuters) - Shares in grounded carrier Kingfisher Airlines(KING.NS) jumped as much as 9.7 percent on Thursday after a letter sent to staff from Chairman Vijay Mallya outlined plans for a revival to be funded with 6.5 billion rupees from his UB Group.
Kingfisher, which lost its operating licence at the end of 2012 and has not flown since the start of October, filed its plan, which included the same funding amount from UB, to regulators in late December.
Kingfisher, once India's second-largest airline, is estimated to owe $2.5 billion in debt to banks, staff, vendors and others. The airline has tried unsuccessfully for more than a year to bring in new investors.
In his letter to staff on Thursday, a copy of which was obtained by Reuters, Mallya said the airline had submitted a detailed plan to the industry regulator to restart operations using seven planes by the start of the 2013 summer schedule, increasing to 21 planes in four months.
The second phase of the plan would see it expand to 57 planes within 12 months of a recapitalisation, Mallya said.
Kingfisher shares ended up 9.7 percent at 14.70 rupees. The stock hit a record low of 7.05 rupees in August.
"All challenges, like the license cancellation, (are) known. Any revival plan would be good for shareholders," said Deven Choksey, managing director of broker K.R. Choksey.
(Reporting by Indulal P.M.; Writing by Tony Munroe; Editing by Matt Driskill)
- Tweet this
- Share this
- Digg this
Trending On Reuters
Religion and Politics
The head of India's most powerful Hindu group vowed to press ahead with a campaign to convert Muslims and Christians to Hinduism, stoking a sensitive debate that has stalled parliament and threatened Prime Minister Narendra Modi's economic reform agenda. Full Article