MIRA
INFORM REPORT
|
Report Date : |
16.11.2011 |
IDENTIFICATION DETAILS
|
Name : |
KINGFISHER AIRLINES LIMITED [w.e.f. 05.09.2008] |
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|
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Formerly Known As : |
DECCAN AVIATION LIMITED |
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Registered Office : |
UB Tower, Level 12, UB City, 24 Vittal Mallya Road, |
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Country : |
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Financials (as on) : |
31.03.2011 |
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Date of Incorporation : |
15.06.1995 |
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Com. Reg. No.: |
08-018045 |
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Capital
Investment / Paid-up Capital : |
Rs.10508.792 Millions |
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|
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CIN No.: [Company
Identification No.] |
L85110KA1995PLC018045 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRD00795E |
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Legal Form : |
A Public Limited Liability Company. The Company’s shares are listed on
the Stock Exchanges. |
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Line of Business : |
Subject is engaged in rendering scheduled and unscheduled
aircraft passenger and cargo services, including charter services. |
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No. of Employees : |
7317
[Approximately] |
RATING & COMMENTS
|
MIRA’s Rating : |
B (26) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
Status : |
Moderate |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. Profitability
of the company is under severe pressure. There appears huge accumulated
losses recorded by the company. Trade relations are reported as fair.
Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.
|
NOTES : Any query related to this
report can be made on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered
Office : |
UB Tower, Level 12, UB City, 24 Vittal Mallya Road, |
|
Tel. No.: |
91-80-22272808 |
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E-Mail : |
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Website : |
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Head Office : |
The Qube, C.T.S. No. 1498 A/2, 4th Floor, |
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Tel. No.: |
91-22-2856 6000 |
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Fax No.: |
91-22-2856 6225 |
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E-mail : |
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Area : |
5000 Sq. ft |
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Location : |
Owned |
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Airport Office : |
SOCC, Terminal 1A, |
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Branch Office
: |
·
C/o.
MISL Cargo Complex, Tel. No. 91-80-56995760 Fax No. 91-80-2352645 ·
202,
Elegant Apartments, Raj Tel./Fax No. 91-40-23308713 E-mail : decanhyd@satyam.net.in
·
10,
Avatar, 27, Tel. No. 91-44- 24454110/3445 Fax No. 91-44- 24457215 ·
E-54,
Anand Niketan, Tel. No. 91-11-24103521/21 Fax No. 91-11-24103522 E-mail : deccan@mantronline.com
·
Near Tel. No. 91-22-25704517 ·
Jakkur
Aerodrome, Tel. No. 90-80-8567523/8567378 E-mail : deccanair@vsnl.com ·
Hanger
# 8, Juhu Aerodrome, Mumbai – 400049, Tel. No. 91-22-26611601 E-mail : daplmum@vsnl.net ·
Tel. No. 91-44-24740560/24714109 E-mail : deplchennai@satyam.net.in ·
Room
# 605, Tel. No. 91-651-2480377/2480326 E-mail : deplranchi@yahoo.co.in
|
DIRECTORS
As on 31.03.2011
|
Name : |
Dr. Vijay Mallya |
|
Designation : |
Chairman and Managing Director
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Name : |
Mr. Subhash R. Gupte |
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Designation : |
Vice
Chairman |
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Name : |
Mr. A K Ravi Nedungadi |
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Designation : |
Director |
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Name : |
Mr. Vijay Amritraj |
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Designation : |
Director |
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Name : |
Mr. Anil Kumar Ganguly |
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Designation : |
Director |
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Name : |
Mr. Piyush G Mankad |
|
Designation : |
Director |
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Name : |
Mr. Ghyanendra Nath Bajpai |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Bharat Raghavan |
|
Designation : |
Company Secretary and Chief Legal Officer |
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Name : |
Mr. A Raghunathan |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Sanjay Aggarwal |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Manoj Chacko |
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Designation : |
Executive Vice President |
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Name : |
Mr. Vijay Maliya |
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Designation : |
Executive Chairman of the Board, Managing Director |
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Name : |
Mr. A K Ravi Nedungadi |
|
Designation : |
President and Chief Financial Officer – the UB Group |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2011
|
Category |
No.
of Shares |
Percentage
of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
263077125 |
52.85 |
|
|
263077125 |
52.85 |
|
|
|
|
|
|
15117321 |
3.04 |
|
|
13563180 |
2.72 |
|
|
28680501 |
5.76 |
|
Total shareholding of Promoter and Promoter Group (A) |
|
|
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
923925 |
0.19 |
|
|
116334738 |
23.37 |
|
|
1136595 |
0.23 |
|
|
15041220 |
3.02 |
|
|
133436478 |
26.81 |
|
|
|
|
|
|
27401271 |
5.50 |
|
|
|
|
|
|
28799944 |
5.79 |
|
|
12108060 |
2.43 |
|
|
4275844 |
0.86 |
|
|
1206945 |
0.24 |
|
|
517459 |
0.10 |
|
|
1845640 |
0.37 |
|
|
705800 |
0.14 |
|
|
72585119 |
14.58 |
|
Total Public shareholding (B) |
206021597 |
41.39 |
|
Total (A)+(B) |
497779223 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
- |
- |
|
Total (A)+(B)+(C) |
497779223 |
100.00 |
(1) Indian
Bodies Corporate
Individual shareholders holding nominal
share capital up to Rs.0.100 millionBUSINESS DETAILS
|
Line of Business : |
Subject is engaged in rendering scheduled and unscheduled
aircraft passenger and cargo services, including charter services. |
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|
|
|
Services : |
Airlines Services |
GENERAL INFORMATION
|
No. of Employees : |
7317
[Approximately] |
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Bankers : |
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Facilities : |
Notes: 1. Securities
Offered: Rs.in millions
2. Previous year's data rearranged inline with the securities position prevailing as on 31st March 2011.
Notes: Rs.in millions
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Banking
Relations : |
- |
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Auditors : |
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Name : |
B K Ramadhyani
and Company Chartered
Accountants |
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Address : |
4B, 4th
Floor, 68, Chitrapur Bhavan, 8th Main, 15th Cross,
Malleswaram, |
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|
|
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Holding Company : |
United Breweries (Holdings) Limited (from August 1, 2008) |
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|
|
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Fellow
Subsidiaries : |
|
|
|
|
|
Subsidiary
of the Company : |
Vitae
India Spirits Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1,650,000,000 |
Equity Shares |
Rs.10/- each |
Rs.16500.000 millions |
|
2,600,000,000 |
Preference Shares |
Rs.10/- each |
Rs.26000.000 millions |
|
|
Total |
|
Rs.42500.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
497,779,223 |
Equity Shares |
Rs.10/- each |
Rs.4977.792
millions |
|
553,100,000 |
8% Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs.5531.000
millions |
|
|
Total |
|
Rs.10508.792 millions |
Notes:
1)
130,033,350 Equity Shares and 9,700,000, 6% Redeemable Non Cumulative
Preference Shares were allotted during the year 2008 - 2009 pursuant to the
Scheme of Arrangement under Section 391 to 394 of the Companies Act 1956
approved by the Honourable High Court of Karnataka dated June 16, 2008 which
resulted in demerger of the Scheduled Airline Business of Kingfisher Training
and Aviation Services Limited.
2)
2,72,84,390 (March 31, 2009 - 2,72,84,390) equity shares of Rs. 10/- each have
been allotted as fully paid up bonus shares by capitalisation of securities
premium of Rs.253.750 millions (March 31, 2009 - Rs.253.750 millions) and
balance in Profit and Loss Account of Rs.19.094 millions (March 31, 2009 -
Rs.19.094 millions).
3) Movement
of share capital (number) during the year 2010-2011 is as follows:
|
Particulars |
Equity
shares of
Rs. 10 each |
6%
redeemable preference
shares of
Rs 100 each |
8%
cumulative redeemable preference
shares of
Rs 10 each |
7.5%
compulsorily convertible
preference shares
(CCPS) of
Rs 10 each |
6%
CCPS of Rs
10 each |
|
At the beginning
of the year |
265908883 |
9700000 |
- |
- |
- |
|
Issued during the
year |
231870340 |
- |
553100000 |
1398100000 |
97000000 |
|
|
497779223 |
9700000 |
553100000 |
1398100000 |
97000000 |
|
Amendment of
terms and conditions to result in 970,00,000 6% CCPS |
- |
9700000 |
- |
- |
- |
|
Converted into
equity shares |
- |
- |
- |
1398100000 |
97000000 |
|
At the close
of the year |
497779223 |
- |
553100000 |
- |
- |
Notes:
a) 7.5% CCPS of Rs 10
each were issued in conversion of loans and interest due to banks and certain
promoter companies in terms of the Master Debt Recast Agreement dated December
21, 2010 (MDRA).
b) 8% cumulative
redeemable preference shares of Rs 10 each were issued in conversion of loans
and interest due to banks in terms of the MDRA.
c) 21,68,26,916 and
1,50,43,424 Equity shares were issued in conversion of 7.5% CCPS and 6% CCPS
respectively.
4) Number of shares
held by the holding company and its subsidiaries (as certified by the
management)
Equity Shares -
27,66,40,305 (March 31, 2010 - 16,11,00,604)
6% Redeemable
Preference Shares - Nil (March 31, 2010 - 97,00,000)
5) 8% cumulative
redeemable preference shares are redeemable at par not later than the expiry of
12 years from the date of allotment.
6) Optionally
Convertible Debentures (OCDs) vide schedule 3B shall each be optionally
converted into equity shares of the Company of the face value of Rs. 10/- each,
at the option of the holder, at such time as may be determined by the Board
which shall be not later than 18 months from the date of allotment of the OCDs
and at a conversion price determined in accordance with the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
10508.792 |
3629.089 |
3629.089 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
13434.516 |
802.219 |
802.219 |
|
|
4] Employees Stock Option outstanding |
29.509 |
74.817 |
81.094 |
|
|
5] (Accumulated Losses) |
[53484.743] |
[43210.763] |
[25765.857[ |
|
|
NETWORTH |
[29511.926] |
[38704.638] |
[21253.455] |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
51845.282 |
48424.255 |
26225.211 |
|
|
2] Unsecured Loans |
18725.471 |
30801.712 |
30430.374 |
|
|
TOTAL BORROWING |
70570.753 |
79225.967 |
56655.585 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
TOTAL |
41058.827 |
40521.329 |
35402.130 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
15718.869 |
15545.142 |
15755.166 |
|
|
Capital work-in-progress |
6733.463 |
9806.050 |
16309.465 |
|
|
Foreign Currency Monetary Item translation Difference Account |
0.000 |
279.827 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
0.500 |
0.500 |
0.500 |
|
|
DEFERREX TAX ASSETS |
29277.831 |
24343.651 |
16697.320 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1876.455
|
1648.774
|
1472.468 |
|
|
Sundry Debtors |
4405.270
|
3224.853
|
2742.328 |
|
|
Cash & Bank Balances |
2523.625
|
2064.670
|
1718.670 |
|
|
Other Current Assets |
22.393
|
23.883
|
39.746 |
|
|
Loans & Advances |
20910.516
|
17608.858
|
14359.110 |
|
Total
Current Assets |
29738.259
|
24571.038
|
20332.322 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
28631.626
|
26026.604
|
28343.112 |
|
|
Other Current Liabilities |
12415.788
|
8987.045
|
6603.641 |
|
|
Provisions |
621.078
|
467.653
|
455.458 |
|
Total
Current Liabilities |
41668.492
|
35481.302
|
35402.211 |
|
|
Net Current Assets |
(11930.233)
|
(10910.264)
|
(15069.889) |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
45.088 |
|
|
Initial Cost on Leased Aircraft |
1258.397 |
1456.423 |
1664.480 |
|
|
|
|
|
|
|
|
TOTAL |
41058.827 |
40521.329 |
35402.130 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income From Services |
62333.790 |
50679.182 |
52389.812 |
|
|
|
Other Income |
2621.833 |
2031.229 |
636.046 |
|
|
|
TOTAL |
64955.623 |
52710.411 |
53025.858 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Employees Costs |
6760.085 |
6887.549 |
8238.523 |
|
|
|
Aircraft Fuel Expenses |
22740.258 |
18029.876 |
26026.208 |
|
|
|
Aircraft / Engine Lease Rentals |
9839.956 |
10938.152 |
11851.322 |
|
|
|
Operating and Other Expenses |
24212.640 |
23756.495 |
24340.276 |
|
|
|
Costs incurred on account of premature termination of lease/ Purchase
contracts |
0.000 |
0.000 |
[2446.979] |
|
|
|
TOTAL |
63552.939 |
59612.072 |
68009.350 |
|
|
|
|
|
|
|
|
|
PROFIT/[LOSS]
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION |
1402.684 |
[6901.661] |
[14983.492] |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
13129.400 |
11025.863 |
7785.566 |
|
|
|
|
|
|
|
|
|
|
PROFIT/[LOSS]
BEFORE TAX, DEPRECIATION AND AMORTISATION |
[11726.716] |
[17927.524] |
[22769.058] |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
2410.376 |
2172.875 |
1715.893 |
|
|
|
|
|
|
|
|
|
|
Exceptional Item |
912.465 |
3576.547 |
0.000 |
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation Difference |
158.272 |
502.209 |
2375.354 |
|
|
|
|
|
|
|
|
|
|
PROFIT / [LOSS]
BEFORE TAX |
[15207.829] |
[24179.155] |
[26860.305] |
|
|
|
|
|
|
|
|
|
Less |
TAX |
[4933.849] |
[7706.949] |
[5463.762] |
|
|
|
|
|
|
|
|
|
|
PROFIT / [LOSS]
AFTER TAX |
[10273.980] |
[16472.206] |
[21396.543] |
|
|
|
|
|
|
|
|
|
Less |
Effect of Change in method of accounting Maintenance Rent
reserves upto March 31, 2008 |
0.000 |
0.000 |
[5308.244] |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
[43210.763] |
[25765.857] |
[9677.558] |
|
|
|
|
|
|
|
|
|
|
Foreign exchange Gain in respect of long term monetary
items adjusted |
0.000 |
1459.050 |
0.000 |
|
|
Less |
Adjustment for depreciation pertaining to previous year |
0.000 |
354.403 |
0.000 |
|
|
Less |
Amortization of foreign exchange gain for previous year |
0.000 |
[840.753] |
0.000 |
|
|
|
BALANCE CARRIED
TO THE B/S |
[53484.743] |
[43210.763] |
[25765.857] |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Passenger / Cargo Revenue |
8324.876 |
6846.678 |
2191.199 |
|
|
|
Miscellaneous Income |
0.000 |
0.000 |
255.500 |
|
|
|
Profit / (Loss) on transfer of assets |
0.000 |
142.186 |
(51.303) |
|
|
TOTAL EARNINGS |
8324.876 |
6988.864 |
2395.396 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Capital Goods |
733.671 |
62.607 |
49.925 |
|
|
|
Stores & Spares |
708.872 |
314.256 |
854.136 |
|
|
TOTAL IMPORTS |
1442.543 |
376.863 |
904.061 |
|
|
|
|
|
|
|
|
|
|
Earnings/ Loss
Per Share (Rs.) |
[40.16] |
[61.95] |
[72.33] |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2011 (Rs. In Millions) |
30.09.2011 (Rs. In
Millions) |
|
|
|
1st
Quarter |
2ND
Quarter |
|
Net Sales |
|
18816.410 |
15281.600 |
|
Total Expenditure |
|
19063.800 |
19001.330 |
|
PBIDT (Excl OI) |
|
[247.390] |
[3719.730] |
|
Other Income |
|
293.650 |
1020.950 |
|
Operating Profit |
|
46.260 |
[2698.780] |
|
Interest |
|
3058.020 |
3343.810 |
|
Exceptional Items |
|
[23.950] |
[109.700] |
|
PBDT |
|
[3035.710] |
[6152.290] |
|
Depreciation |
|
865.460 |
785.290 |
|
Profit Before Tax |
|
[3901.170] |
[6937.580 |
|
Tax |
|
[1265.740] |
[2250.900] |
|
Provisions and Contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
[2635.440] |
[4686.680] |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustment |
|
0.000 |
0.000 |
|
Net Profit |
|
[2635.440] |
[4686.680] |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
[15.81]
|
[31.25] |
[40.35]
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
[24.40]
|
[47.71] |
[51.27]
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
[33.45]
|
[60.27] |
[74.43]
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
[0.51]
|
[0.62] |
[1.26]
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
[3.80]
|
[2.96] |
[4.33]
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.71
|
0.69 |
0.57
|
LOCAL AGENCY FURTHER INFORMATION
Company
History
Subject is the largest charter aviation company in
Scheduled Airline
Operations
During the year, the Company had a domestic market share of 19.8% and
carried more than 12 millions passengers across both domestic and international
sectors. Fleet size of aircraft used in scheduled operations stood at 66
aircraft at year end, and an average schedule comprised of 366 domestic and 28
international flights daily over a route network (as on March 31, 2011)
covering 59 domestic and 8 international destinations.
During the year, 14 of the Airbus A320 family aircraft in the Company’s
fleet which use the V2500 engines manufactured by IAE International Aero
Engines AG (“IAE”) had to be grounded due to technical problems relating to the
engines. The Company has made arrangements with IAE to perform maintenance and
support work on its entire fleet of engines, including undertaking those
measures identified by the United States Federal Aviation Administration and
other support work to improve on wing performance. By March 31, 2011, the Company
had re-introduced ten aircraft back into service and the balance have also
since been inducted into operations.
The grounding of aircraft resulted in a 10% (1,222 million seat
kilometres) drop in domestic capacity. Despite the drop in domestic capacity by
10%, the Company’s domestic passenger count increased by 2.6% demonstrating
sharply improved productivity.
During the year , the Company undertook a further expansion in its
international operations by introduction of a new wide-body route from
The Company is the only Indian airline to be a memberelect of oneworld,
which is the premier global airline alliance. It brings strong brand
recognition comprising leading airlines such as American Airlines, British
Airways, Cathay Pacific, Qantas and Finnair. oneworld serves airports in 150
countries through 9,000 daily flights with member airlines based in every
continent.
Kingfisher Airlines’ code share arrangements with British Airways has
accelerated the growth trajectory of the Company into key international markets
providing enhanced connectivity and traffic. The Company has achieved market
share leadership in most of the international sectors where operations have
been launched, within a short span of 1 to 2 years of launch. This resulted in
the Company’s combined domestic and international capacity increasing by 9.2%
(1,365 million seat kilometers), while the total passenger count has increased
by 8.9%.
The Company has continued major initiatives during the year to reduce
distribution costs, implement fuel management systems, improve aircraft
utilization and renegotiate general contracts in order to enforce revenue and
cost competitiveness.
To enhance consumer connect, the Company continued its focus on various
marketing and commercial initiatives including tie-ups with corporate houses to
get premium business. Campaigns to leverage and promote the Company’s network
reach and product offerings were launched. During the year, the Company won the
coveted award for the best frequent flyer program in category ‘Best Promotion
for Redemption’ and ‘Best Loyalty Credit Card’ at Frequent Travelers Awards
2011. In view of operating losses incurred during the year, the Directors do
not recommend payment of any dividend.
Outlook
The Company is one of
awarded frequent flyer program and wide distribution.
The country’s economy continues to be strong with GDP growth estimates
being maintained in the range of 8 - 8.5%. Passenger traffic has been buoyant
in the current year as recovery continues on the back of a strengthening
macro-economic environment. Domestic seat capacity is expected to expand lower
than growth in demand, enabling improved revenue performance for the industry.
In fact the Company has achieved load factors in excess of 80% in the current
year. To further improve consumer franchise, various marketing initiatives and
enhanced customer loyalty programs have been undertaken.
The Company is optimistic of improved performance in the current year,
primarily driven by improving domestic and international passenger revenue, the
benefits of debt recast together with lowered interest burden, and various
other initiatives taken by the Company to lower direct operating costs.
Debt Recast
Package
During the year, the Company has implemented a Debt Recast Package with
its consortium of bankers, salient features of which are:
1) (a) (i) Rs.7,501 millions of Loan from the bankers was converted into
7.5% Compulsorily Convertible Preference Shares. The 7.5% Compulsorily
Convertible Preference Shares were thereafter converted into equity shares in
accordance with the pricing regulations of the Securities and Exchange Board of
India (SEBI).
(ii) Rs. 5,531 millions of Loan from the bankers was converted into 8%
Cumulative Redeemable Preference Shares redeemable at par after 12 years.
(iii) Repayment of the balance loans was rescheduled with a moratorium
on repayment of principal of 2 years and step-up repayment over the subsequent
7 years.
(iv) Interest for the period July 1, 2010 to March 31, 2011 on loans
from the banks was converted into a funded interest term loan repayable in 9
years including 2 years moratorium.
(v) Interest rate on loans reduced by over 300 bps.
(vi) Additional fund based loan facilities of Rs.7,683.2 millions and
non-fund based facilities of Rs.4,444 millions sanctioned by the banks.
(vii) Part of the working capital limits of Rs.2,974 millions converted
into working capital term loans.
(b) Loans from Promoters of Rs. 6,480 millions were converted into 7.5%
Compulsorily Convertible Preference Shares and thereafter into equity shares,
pricing as per SEBI regulations. Also, the terms of 6% Redeemable Preference
Shares of Rs. 970 millions issued to the Promoters were varied so that they
became 6% Compulsorily Convertible Preference Shares which thereafter were
converted into equity shares, pricing as per SEBI regulations.
Consequent to (a) and (b) above, the Company’s paid-up equity capital
stood increased from Rs. 2659.089 millions to Rs. 4977.792 millions on March
31, 2011.
2) Loans / Inter corporate deposits from certain business associates aggregating
to Rs.7,093 millions were converted into 7,09,31,985 8% optionally convertible
debentures of Rs.100/- each (“OCDs”) which are convertible into equity shares
for a period of 18 months from their issue, after which they are redeemable.
These OCDs are convertible into equity shares at the option of the holder, and
at a conversion price to be determined as per applicable SEBI regulations with
reference to the date of conversion. As a result, it is not presently possible
to determine either the date of conversion of the OCDs, or the number of equity
shares which may be issued and allotted if and when OCDs are converted.
It is proposed that the terms of the OCDs be varied such that, in the
event the Board decides to undertake the Rights Issue which is to occur prior
to 18 months from the date of allotment of the OCDs, the OCDs shall become
redeemable, in part or in full and in one or more tranches, at the option of
the Board, and in such quantity as may be mutually agreed by the Board and the
holders of the OCDs. The redemption proceeds of OCDs along with accrued
interest are to be appropriated towards subscription to equity shares in the
rights issue. In the event the rights issue has not opened for subscription or
after opening for subscription has not successfully closed during the period of
18 months from the date of allotment of the OCDs, the OCDs shall be governed by
their original terms of issue. Approval of the Members is being sought at the
Annual General Meeting for such variation in the terms of the said OCDs.
Capital
During the year , the Company’s Authorised Share Capital was increased
from Rs. 10000.000 comprising of
900,000,000 Equity Shares of Rs. 10/- each and 10,000,000 Preference Shares of
Rs. 100/- each to Rs. 42500.000 millions comprising of 1,650,000,000 Equity
Shares of Rs. 10/- each and 260,000,000 Preference Shares of Rs. 100/- each at
the Annual General Meeting held on September 30, 2010. Subsequently, at the
Extraordinary General Meeting held on December 20, 2010, the Authorised Share
Capital was re-classified into 1,650,000,000 Equity Shares of Rs. 10/- each and
2,600,000,000 Preference Shares of Rs. 10/- each.
Consequent upon the implementation of the Debt Recast Package, the
Issued, Subscribed and Paid- up Share Capital of the Company has increased from
Rs. 3629.089 millions divided into 265,908,883 Equity Shares of Rs. 10/- each
and 9,700,000 6% Redeemable Non-Cumulative Preference Shares of Rs. 100/- each
to Rs. 10508.792 millions divided into 497,779,223 Equity Shares of Rs. 10/-
each and 553,100,000 8% Cumulative Redeemable Preference Shares of Rs. 10/-
each.
Management
Discussion and Analysis
Industry structure
and development
a. The global economy is on a hesitant path towards recovery. The
outlook for
b. The global airline industry in 2010-11 demonstrated strong recovery
with industry load factors and passenger volumes back to pre-recession levels.
Overall it was a much better year for the global airline industry.
c. International Air Transport Association (IATA), that represents 230
airlines comprising over 93% of scheduled international traffic across 118
countries, has forecast global airline traffic growth of nearly 5%, primarily
driven by the demand growth in Asia Pacific and Middle-East regions.
d. Jet fuel continues to remain a significant element of cost with IATA
forecasts pegging this element at 30% of operating costs in 2011 (up from 26%
in 2010) with an average crude oil price of over US$ 100 per barrel. In
Industry Operating
Environment
a. As per the International Air Transport Association (IATA) outlook for
June 2011, the global airline industry is forecasted to produce a net profit of
US$ 4 billion in 2011. This is half of IATA’s original outlook for 2011 and the
revision in the forecast was forced by demand shocks due to the earthquake and
tsunami in
regions where capacity is closely matched or lags demand. This is
especially true for the Asia-Pacific region which is expected to produce over
50% of the global airline industry’s net profit in 2011.
b. For the year , the domestic passenger traffic in
c. Yields remained stable over the year and premium traffic has
experienced growth. The rise in fuel prices towards the end of the year
compelled the industry to pass on a portion of the price increase to the
consumer through revision of fuel surcharge.
Segment–wise or
product-wise performance of the airline
During the year , the Company ended with a domestic market share of
19.8% in FY11. The airline carried more than 12 millions passengers across
domestic and international sectors. Fleet size of aircraft used in scheduled
operations at year end comprised of 66 aircraft, having an average schedule of
366 domestic and 28 international flights daily and a route network covering 59
domestic and 8 international destinations.
Reflecting the Company’s uniquely flexible network model which is
capable of calibrating seat offerings in response to shifts in demand,
Kingfisher Airlines offers the following classes of world class service:
• Kingfisher First –
Premium Business class of service
• Kingfisher Class – Premium
Economy class of service
• Kingfisher Red – Low fare
class of service
DOMESTIC SECTOR
a. During the year, the Company was the single largest player in the
Indian domestic aviation sector and had the widest reach covering more
destinations and carrying more passengers than any other domestic carrier.
b. The airline achieved a seat factor of 83% in the year, an improvement
of 11 percentage points over the previous year.
c. As a result of the above measures, the Company’s domestic operations
have shown steady improvement.
• The airline’s domestic
EBITDAR margin improved from 12.8% in FY10 to 19.8% in FY11.
• The airline’s RASK
(Revenue per Available Seat Kilometer) on domestic operations improved by 19%
for FY11 over FY10.
• The airline’s CASK (Cost
per Available Seat Kilometer) on domestic operations reduced by 7% over FY10 on
the back of several cost saving initiatives including expat pilot reduction,
fuel consumption reduction, etc.
INTERNATIONAL
SECTOR
During the year, the Company undertook a further expansion in its
international operations by introduction of a new wide-body route from
The Company is the only Indian airline to be a memberelect of oneworld,
which is the premier global airline alliance. It brings strong brand
recognition comprising leading airlines such as American Airlines, British
Airways, Cathay Pacific, Qantas and Finnair. Oneworld serves airports in 150
countries through 9,000 daily flights with member airlines based in every
continent.
Kingfisher Airlines’ code share arrangements with British Airways has
accelerated the growth trajectory of the Company into key international markets
providing enhanced connectivity and traffic. The Company has achieved market
share leadership in most of the international sectors where operations have
been launched, within a short span of 1 to 2 years of launch.
Income
The Company’s total income stood at Rs. 64,956 millions during the
twelve month period from April 2010 to March 2011.
a. Income from services formed 96% of total income at Rs. 64,956
millions. Domestic revenues recorded for the period was Rs. 47,731 millions as
against Rs. 45,220 millions in FY10. This was despite the fact that the airline
deployed 11% lesser seats YoY on account of capacity rationalization in its
domestic operations.
b. During the twelve-month period ending 31 March 2011, the Company’s
International revenues increased to Rs. 14,602 millions, an increase of over
167% as compared to Rs. 5,460 millions in the previous year ended March 2010.
The growth increased disproportionate to capacity increase, reflecting higher
capacity utilisation on an expanded network.
c. Other Operating Income which comprised duty free entitlement stood at
Rs. 1,263 millions during the twelve month period ending 31 March 2011 an
increase of 475% as compared to Rs. 220 millions in the previous year ended 31
March 2010.
d. Other income stood at Rs. 1,359 millions during the twelve month
period from April 2010 to March 2011, a decrease of 25% when compared to the
previous year. Other Income comprised mainly of liabilities no longer required
written back of Rs. 730 millions.
Marketing and
Commercial Initiatives undertaken during the year to enhance the Company’s consumer connect :
To aggressively drive choice for Kingfisher First, their business class
product to corporate flyers.
• To win market share in key markets through innovative offers for
consumers.
• To leverage properties such as Force
• To further strengthen their relationship with travel agents.
• Increase penetration in the corporate segment.
• Increased rigor in driving sales from global markets.
Domestic
operations:
The Company commenced flight operations to new sectors such as
During the year, the Company developed and successfully executed
consumer and trade promotions which contributed towards incremental revenue for
FY 2010-11, as well as built consumer and guest engagement through interactive
contests across the social media network.
The Company has launched media campaigns covering print, radio, on
ground activation and outdoors to promote awareness and increase loads on new
sector launches and reinstated sectors across 20 top markets and remained
The Company also undertook several product enhancement activities such
as the introduction of the new English movie channel/ Air Premiere English,
Indian regional movies and world cinema to cater to the diverse tastes of
consumers. It also increased the depth of In-flight Entertainment with
increased number of movies and television programs, music and games.
International
operations:
The Company commenced 4 new international destinations out of
The Company joined hands with British Airways in a codeshare agreement
on flights to
The Company also launched various promotions and offers during lean
season. This included companion free offer, free gift vouchers on onboard sale,
tie-up with ‘Visa Facilitation Services’ around the world that helped in
enhancing productivity in various sectors.
The Company’s
Outlook
a. The Company which commenced scheduled airline operations in August
2003 continues to be perched atop the industry as
Supplementing its status further as
b. The Indian economy continues its strong growth trajectory with GDP
growth estimated to be around 8% for 2011-12 and is a significant contributor
to growth of the global economy.
c. Passenger traffic continues to rise backed by strong macro-economic
fundamentals and sustained growth across most industry sectors. Industry
traffic increased by over 20% in 2010-11 compared to 2009-10 and such growth is
forecasted to sustain through 2011-12.
d. Yields are expected to remain stable, given the demand/supply
situation.
e. Fuel price has shown steep increase in the last quarter of 2010-11
and as future price movements remain uncertain, industry experts believe jet
fuel price will correspond to an average crude oil price of around US$100 per
barrel. Airline operators will need to continue partial offsetting of any fuel
price hike through fuel surcharge in the ticket prices.
f. After announcing its first-ever positive annual EBITDA, the Company
has budgeted for future years of operating profit even in the wake of high fuel
prices. This will primarily be driven by capacity addition through phased
recovery of grounded aircraft, growth of premium traffic, higher yields and a
focused cost reduction plan.
g. International operations have now stabilized and are headed for
profitability. The Company looks forward to further expansion of its
international network subject to government and regulatory authority approvals.
Awards and Accolades
a) The Company has continued to remain
b) Recognized as ‘Power Brand of India’ for the year 2010-11, by Power
Brands India and “
c) Voted Most Preferred Domestic Airline - Low Cost Carrier and Most
Preferred Domestic airline – Economy Class at CNBC Awaaz travel awards 2010.
d) Voted second runner up (for fleet size below 25 aircraft equipped
with
e) King Club, the frequent flyer program of the Company, won laurels at
the prestigious Frequent Traveler Awards 2010 which include the Best Program of
the Year, Best Elite Program, Best Loyalty Credit Card, Best Redemption Ability
and Best Earning Promotion from Middle East, Asia and Oceania region, being the
only airline from
Unaudited Financial Results for the Quarter Ended June
30, 2011
Rs.in millions
|
Particulars |
Quarter ended 30.06.2011 |
|
|
|
|
Income from Operations |
|
|
Income from Services |
18816.405 |
|
Other Operating Income |
- |
|
|
|
|
Expenditure |
|
|
Employee Costs |
1736.672 |
|
Aircraft Lease Rental |
2473.018 |
|
Aircraft Fuel |
8451.321 |
|
Other Operating Expenses |
6402.786 |
|
Depreciation/ Amortisation |
865.460 |
|
Profit/ (Loss) from
Operations before Interest and Exceptional Item |
[1112.852] |
|
Other Income |
293.653 |
|
Profit/ (Loss) before
Interest and Exceptional Item |
[819.199] |
|
Interest and Financial
Charges |
3058.024 |
|
Profit/ (Loss) afer
Interest but before Exceptional Item and Tax |
[3877.223] |
|
Exceptional Item |
46.740 |
|
Foreign Exchange
Translation Difference |
[22.787] |
|
Profit/ (Loss) from Ordinary
Activities before Tax |
[3901.176] |
|
Tax Expense |
|
|
Current Tax |
- |
|
Deferred Tax Asset |
[1265.736] |
|
Fringe Benefit Tax (Net of
Provision for FBT written back) |
- |
|
Profit/ (Loss) from
Ordinary Activities after Tax |
[2635.440] |
|
Paid-up Equity Share
Capital (face value of Rs. 10/- each) |
4977.792 |
|
Reserves |
-- |
|
Earnings per Share - Basic
and Diluted |
|
|
Before exceptional item |
[5.49] |
|
After exceptional item |
[5.55] |
|
Public Shareholding |
|
|
Number of Shares |
206021597 |
|
Percentage of Shareholding |
41.39% |
|
Promoter and Promoter
Group Shareholding |
|
|
|
|
|
Pledged/ Encumbered |
|
|
Number of Shares |
263077125 |
|
Percentage of Total
promoter and Promoter Group Shareholding (%) |
90.17% |
|
Percentage of Total Share
Capital of the Company ( %) |
52.85% |
|
Non Encumbered |
|
|
Number of Shares |
28680501 |
|
Percentage of Total
promoter and Promoter Group Shareholding (%) |
9.83% |
|
Percentage of Total Share
Capital of the Company ( %) |
5.76% |
Segmentwise
Revenue, Results for the Quarter Ended June 30, 2011
The Company, considering its
present internal financial reporting based on Geographic segment, has identified
Geographic segment as primary segment. The Geographic segment consists of :
1.Domestic
air transportation within
2.International air
transportation outside
Rs.in millions
|
Particulars |
Quarter ended 30.06.2011 |
|
Segment Revenue (Passenger, Cargo, etc) |
|
|
Domestic |
14593.087 |
|
International |
4223.318 |
|
Total |
18816.405 |
|
Segment Result: |
|
|
Domestic |
1798.659 |
|
International |
[229.907] |
|
Total Segment Result |
1568.752 |
|
Interest and Finance Charges |
[3058.024] |
|
Depreciation & Amortisation |
[865.460] |
|
Other Unallocable expenditure |
[1816.144] |
|
Other Unallocable Revenue |
293.653 |
|
Exceptional Item and Foreign Exchange
Translation Difference |
[23.953] |
|
Profit/ (Loss) before Tax Expense |
[3901.176] |
|
Tax |
1265.736 |
|
Net Profit/ (Loss) after Tax |
[2635.440] |
Notes:
1.The
assets and liabilities of the company is not identifiable to the reportable segments.
Hence no disclosure relating to total segment assets and liabilities [capital
employed] are made.
2.The
above data is as certified by management.
Notes:
1.The
above financial results which have been subjected to limited review by the Statutory
Auditors of the Company have been reviewed by the Audit Committee. The Board of
Directors has approved the said financial results at its meeting held on August
10, 2011.
2.3
investor complaints were received and disposed off during the quarter ended
June 30, 2011. There were no investor complaints outstanding at the beginning
or at the end of the quarter.
3.The
Remuneration and Compensation Committee of the Board of Directors of the
Company has considered an Employees Stock Option Plan at its meeting held on
August 10, 2011 and recommended the same to the Board of the Directors of the
Company which has approved the same at its meeting held today subject to the
approval of the shareholders of the Company. This plan proposes to include the
employees transferred to the Company pursuant to the demerger and transfer of
the Commercial Airline Division Undertaking of the erstwhile Kingfisher
Airlines Limited into the Company.
4.Deferred
Tax Asset is recognized on account of unabsorbed depreciation and business
losses for the quarter ended June 30, 2011 aggregating to Rs. 1265.736
millions. The management is of the opinion that there is a virtual certainty
supported by convincing evidence against which such deferred tax will be
realized.
5.The
Company has adopted the Exposure Draft on Accounting Standard - 10 (Revised)
'Tangible Fixed Assets' which allows costs on major repairs and maintenance
incurred to be amortized over the incremental life of the asset. The Company
has extended the same treatment to costs incurred on major repairs and
maintenance for engines pertaining to aircrafts acquired on operating lease.
Had the Company not adopted this method of accounting, the loss before tax for
the quarter and the loss after tax for the quarter would have been higher by
Rs. 388.281 millions and Rs. 262.303 millions respectively. This revised
accounting policy has been confirmed by an independent expert and in the
opinion of the management, this accounting treatment has resulted in a fair
depiction of the working results and the state of the affairs of the Company.
6.In
terms of agreements entered into with a certain party in respect of assets
taken on lease, the Company is to pay lease rentals only in the event of breach
of certain contractual obligations in future. No provision is considered
necessary as the Company is confident of meeting the relevant obligations.
Additionally, the use fees paid in respect of these leased assets are, in
accordance with the Company's understanding, treated as maintenance reserves.
The Company is taking steps to formalize this understanding with the relevant
lessors. In terms of the Company's accounting policy, these use fees are
initially included under loans and advances and are expensed out to the profit
and loss account of the time of incurrence of major maintenance expenditure /
termination of agreements.
7.The
Company has incurred substantial losses and its networth has been eroded.
However, having regard to improvement in the economic sentiment,
rationalization measures adopted by the Company, fleet recovery and the
implementation of the debt recast package with the lenders and promoters
including conversion of debt into share capital, these interim financial
statements have been prepared on the basis that the Company is a going concern
and that no adjustments are required to the carrying value of assets and
liabilities.
8.Previous
period/year figures have been reclassified to confirm with current period/year
presentation, wherever applicable.
Fixed
Assets
§ Computer Software
§
Trademarks
§
Design
- Aircraft Interiors
§
Non
Compete Fees
§
Land
and Buildings
§
Building
on Rented Land
§
Leasehold
Improvements
§
Ground
Support and Other Equipment
§
Computers
§
Office
Equipment
§
Furniture
and Fixtures
§
Vehicles
§
Aircraft
and Helicopter
§
Aircrafts
Web Details
Business Description
Subject is engaged in rendering scheduled and unscheduled aircraft passenger
and cargo services, including charter services. The Company offers three
classes of service: Kingfisher First (premium business class of service),
Kingfisher Class (premium economy class of service) and Kingfisher Red (low
fare basic class of service). As of March 31, 2010, the Company had a fleet of
68 aircraft, having an average schedule of 366 domestic and 12 international
flights daily and a route network covering 63 domestic and seven international
destinations. The Company’s wholly owned subsidiary is Vitae India Spirits
Limited. During the fiscal year ended March 31, 2010 (fiscal 2010), the Company
returned five Airbus A320 aircraft, 4 ATR-42 aircraft and 1 ATR-72 aircraft.
For the nine months ended 31 December 2010, subject’s revenues increased 22% to
RS48.36B. Net loss decreased 38% to RS6.72B. Revenues reflect an increase in
income from operations. Lower loss reflects an decrease in employee cost, a
fell in aircraft lease rentals and a decrease in other operating expense. The
Company is into air passenger service, and the Companies registered office is
in
More Business Descriptions
Provides a low-cost, no-frills scheduled airline service and a non-scheduled private helecopter hire service.
Board of Directors
Dr . Vijay Mallya
Dr . Vijay Mallya, Ph.D., is Executive Chairman of the
Board, Managing Director of Kingfisher Airlines Limited. He served as Chief
Executive Officer of the Company till 30 September 2010. He holds a Ph.D. in
Business Administration, is a well known industrialist and a Member of
Parliament (Council of States). He took over the reins of UB Group at the young
age of 28 and has been instrumental in growing it into a multinational business
conglomerate. Dr. Vijay Mallya is the Chairman of the UB Group and several
other public companies in
Mr. Subhash R. Gupte
Mr. Subhash R. Gupte is a Non-Independent Non-Executive Vice
Chairman of the Board of Kingfisher Airlines Limited. He is a Chartered
Accountant with over four decades of corporate, financial, administration and
personnel experience. He has over two decades experience in the Aviation
Industry and served as the Acting Chairman and Managing Director of Air
Mr. Vijay Robert
Amritraj
Mr. Vijay Robert Amritraj is Non-Executive Independent
Director of Kingfisher Airlines Limited. He was a recipient of the Padma Shri,
a designated United Nations Messenger of Peace and a recipient of the International
Sportsman of the Year Award for the year 1987. He was the youngest player to
play Davis Cup for any country. He subsequently served
Mr. Ghyanendra Nath
Bajpai
Mr. Ghyanendra Nath Bajpai is Non-Executive Independent
Director of Kingfisher Airlines Limited. He holds a Master’s Degree in Commerce
from the
Mr. Anil Kumar
Ganguly
Mr. Anil Kumar Ganguly is Non-Executive Independent Director
of Kingfisher Airlines Limited. Mr. Ganguly is a fellow member of the Institute
of Chartered Accountants of India. He has over four decades of experience in
various facets of corporate management, such as finance, accounting, audit,
taxation and corporate affairs. He also has experience in sales and marketing
in
Mr. Piyush G. Mankad
Mr. Piyush G. Mankad is Non-Executive Independent Director
of Kingfisher Airlines Limited. He was appointed as Additional Director of
Kingfisher Airlines Limited on October 15, 2008. He was a distinguished member
of the Indian Administrative Service and served in the Cabinet Committee in the
Ministry of Finance. He also serves on the Board of various Companies as an
Independent Director. He has been a Director of the following Companies: Tata
International Limited, Max India Limited, DSP Blackrock Investments Managers
Private Limited (formerly DSP Merrill Lynch Fund Managers Limited), Tata Elxsi
Limited, ICRA Limited, United Breweries (Holdings) Limited, Heidelberg Cement
India Limited (formerly Mysore Cements Limited), M and M Financial Services
Limited, Noida Toll Bridge Company Limited, SRF Limited, Tata Power Company
Limited, Mahindra Forgings Limited.
Press Realease:
Indian airlines to
allow foreign investment: report
24 October 2011
Mumbai, Oct 24, 2011 (AFP) –
The Indian government may lift a ban on foreign airlines investing in the country's domestic carriers as they battle intense competition and high fuel costs, the Economic Times said on Monday.
The financial daily said the country's aviation ministry had given its approval to the move in principle with further discussions to determine what level of investment would be allowed.
If approved, the move could help inject much-needed capital into private Indian airlines, which have been struggling with increased competition, rising fuel costs and a falling rupee in recent months.
Currently, foreign airlines are banned from investing in
Indian airline firms either directly or through equity markets. But foreign
institutions can buy shares in
The newspaper said the Department of Industrial Policy and Promotion, which frames policy on foreign investment, was in favour of overseas carriers taking up to a 26 percent stake in Indian airlines.
But the civil aviation ministry preferred a lower, more restrictive cap of 24 percent, it added.
Kingfisher Airlines said last month that it was cutting its low-cost operations to concentrate on full-fare flights in a bid to cut losses.
State-run Air
Press Release
IndiGo to start KTM service on Oct 28
19 October 2011
Press Release
Kingfisher grounds
only flight to Shimla
18 October 2011
Shimla, October 18 -- The only flight to this Himachal
Pradesh tourist resort has been suspended till Oct 30, an official said here
Tuesday. "Due to some technical reasons of Kingfisher, the daily flight
between
Press Release
14 October 2011
Kingfisher Airlines started new services from
Manoj Chacko, EVP of commercial at Kingfisher Airlines,
said, "I am delighted to announce the launch of three new international
routes out of South India to Sri Lanka. The addition of these new routes further
strengthens our route network and we now offer enhanced connectivity especially
into and out of
Kingfisher Airlines also offers services from
UB Group borrows Rs.4000.000 Millions from SICOM for
Kingfisher
15 November 2011
Four companies linked to
Kingfisher and the UB Group have collectively borrowed Rs.4000.000 Millions
from SICOM, in which the state government holds 49% equity. The loans, raised in
July-end, assume significance against State Bank of
Meanwhile, UB Group President and
CFO Ravi Nedungadi told ET that Kingfisher's parent, UB Holdings, has raised
Rs.7630.000 Millions unsecured loans for Kingfisher since the beginning of the
year. Neither SICOM nor the UB Group confirmed whether the loan from SICOM was
part of the Rs.7630.000 Millions raised to support the airline.
"UB Holdings, the principal
promoter of Kingfisher Airlines, has facilitated funding of Rs.7630.000
Millions till date since the beginning of the year," said Nedungadi.
It was a clear demonstration of
the UB Group's commitment to the airline, Nedungadi said, adding, these funds
had been inducted as unsecured loans into Kingfisher Airlines, . Calls and
emails to SICOM officials went unanswered.
The loans to Kingfisher in July,
along with an earlier loan to UB Holdings, comprise 60% of SICOM's 2010-11 net
worth and 9% of the finance company's sanctioned loans. In terms of its net
worth, SICOM has higher exposure to the group than some of the large public
sector banks.
SICOM's earlier loan of Rs.540.000
Millions (as of 2010-11) to UB Holdings is secured by 18 million shares of
Kingfisher, and 250,000 shares of United Spirits, which houses the whisky
business of the UB Group. The loans given subsequently in July this year are
secured by the current assets of the four companies. According to the SICOM
website, the company provides promoter funding.
Two of the beneficiaries of the
SICOM loans - Margosa Consultancy and Redect Consultancy - had earlier used
funds raised from other UB Group companies to subscribe to the optionally
convertible debentures issued by the airline at the time of its last round of
debt restructuring earlier this year.
About 98% of the assets of these
two companies in 2010-11 comprise investments in, and loans to, Kingfisher Airlines
amounting to Rs.7420.000 Millions.
Margosa and Redect are described
in stock exchange disclosures as 'persons acting in concert' with UB Holdings,
Kingfisher's parent.
Banks to take control of cash flow of Kingfisher Airlines
15 November 2011
MUMBAI Banks will take control of
the cash flow of Kingfisher Airlines - a harsh step that lenders rarely take to
protect their exposure. They will put in place a mechanism where the airline's
earnings will flow into one bank account that will be closely tracked to avert
loan defaults.
The decision was taken by the
lenders at a hurriedly called meeting last week as the Vijay Mallya promoted
airline hit the headlines after it cancelled 200 flights and sought government
help. At present, Kingfisher operates similar accounts, better known as escrow,
with some foreign banks that are not its lenders. The company's earnings are
parked in these accounts for servicing loans and payment of bills.
But after the recent developments,
lenders have insisted that a new escrow account be opened with one of the
lending banks, said a person on condition of anonymity. "No decision has
been taken on where the account will be opened, but there is some understanding
ICICI Bank will handle the cash flow through the escrow account. The details of
the arrangement and how the account will function are yet to be worked
out," said a banker.
The designated bank will monitor
the cash flows and use its discretion while releasing payments to fuel
companies, lenders and aircraft maintenance companies.
"The idea is to ring-fence
the cash flow to avoid defaults. The bank managing the cash flow will share the
transaction details with other lenders so there are no rifts among the
banks," said the person. Industry circles think the move may be a prelude
to a corporate debt restructuring programme where lenders jointly decide to
reschedule loan repayments and lessen the borrower's burden.
With oil companies asking the
debt-laden airline to clear dues, banks are worried the company will find it difficult
to pay interest on loans. According to another bank official, the lenders have
decided to form a core group of five banks that will focus on the company's
finances. The group includes State Bank of
"There are 13 lenders and
it's not feasible to bring them all together. Therefore, a core group of
lenders is being formed," said the banker. SBI, the lead lender, has asked
the airline to bring in Rs.4000.000 Millions in fresh equity before any loan
restructuring can be initiated.
Less than a year ago, banks
restructured close to Rs.70000.000 Millions of loans to Kingfisher. Some loans
were converted into equity and tenures were extended for the rest.
Kingfisher Airlines doubles loss on fuel costs to
Rs.4690.000 Millions
15 November 2011
MUMBAI: Cash-strapped Kingfisher
Airlines on Tuesday reported a doubling of its loss in the fiscal second
quarter on higher fuel prices and operating costs, amid investor worries about
its future.
The company said it has suffered
"substantial losses" and its net worth has been eroded.
Kingfisher has been asked by its
creditors to raise $160 million in equity and the carrier is considering a
proposal to sell real estate to help pave the way for a debt restructuring, a
banker said on Monday.
The carrier's net loss in the
quarter ended September 30 rose to Rs.4690.000 Millions ($93 million) from
Rs2310.000 Millions in the year-ago period, the company said in a statement to
the stock exchanges. Aircraft fuel expenses in the quarter rose 70 percent to
Rs.8170.000 Millions, it said.
The carrier has become one of the
main casualties of high fuel costs and a fierce price war between a handful of
airlines which, between them, have ordered hundreds of aircraft for delivery
over the next decade in an ambitious bet on the future.
At 10:12 AM, shares in Kingfisher
Airlines rose 0.70% to Rs.21.50.
SICOM, the non-banking finance
company partly owned by the
Banks will take control of the
cash flow of Kingfisher Airlines - a harsh step that lenders rarely take to
protect their exposure. They will put in place a mechanism where the airline's
earnings will flow into one bank account that will be closely tracked to avert
loan defaults. The decision was taken by the lenders at a hurriedly called
meeting last week as the Vijay Mallya promoted airline hit the headlines after
it cancelled 200 flights and sought government help.
Kingfisher Airlines turns to Mallya's business partners for
funds
15 November 2011
MUMBAI: The troubled Kingfisher
Airlines Ltd has once again turned to business associates of its billionaire
promoter Vijay Mallya for capital infusion into
The airline has recently received
Rs7630.000 Millions from certain associates, mostly Mallya's allies from the
mainstay liquor business, as unsecured loan. This is besides the Rs7090.000
Millions the company received from them through optionally convertible
debentures (OCDs) earlier this year. These business associates are deemed as
persons acting in concert (PAC) with the promoter. On Monday, the airline's
lenders led by State Bank of India ( SBI) said that they will release fresh
funds or restructure loans only after the promoter group showed up with at
least Rs.8000.000 Millions in capital. The lenders also wanted the airline to
come up with a viable business plan to compete in the market.
Kingfisher may be tapping the
associates, or co-investors, for further fund requirements, said sources at
Mallya's beer to airline conglomerate, UB Group. The airline's parent UB
Holdings Ltd is tapping these co-investors who are betting on medium-term
upsides when foreign direct investment (FDI) is allowed in the aviation sector.
Promoters along with PACs hold
about 59% stake in the company, which may get diluted further as they infuse
more funds. "A further dilution in UB Group shareholding is not worrying
since the co-investors are PACs," said a company source. Kingfisher, with
Rs65000.000 Millions debt, has tried to raise equity through multiple routes in
the past one year. It had explored a $250 million GDR which failed take off in
the wake of the Eurozone crisis and disturbances in the Arab world. More
recently, it has set in motion a rights issue to raise up to Rs.20000.000
Millions.
The lender consortium converted a
part of their loans to equity in March this year translating to 23% stake for
the banks in the company. In recent weeks, Kingfisher approached banks with a
proposal for their participation in the proposed rights issue and for
converting the high cost domestic debt into foreign currency loans. The airline
also wanted additional funds for working capital needs citing 50% surge in ATF
price in recent months. But lenders have sought more sureties from the airline
management as the domestic banks have faced heat over rising bad loans.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.50.56 |
|
|
1 |
Rs.80.30 |
|
Euro |
1 |
Rs.68.79 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
2 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
26 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.