Finding an ally
New Delhi, Nov. 20: Buyout major TPG is the sole private equity player to have responded to Kingfisher Airlines’ approaches to buy a stake in the troubled carrier. However, TPG is not willing to buy more than a nine-to-ten-per-cent stake in the airline.
Sources in the UB group said the company wanted to sell a 24 per cent stake in the airline to a consortium of private equity investors.
Recently Vijay Mallya-led United Spirits Ltd (USL) offered to sell promoter’s shares in another firm — Pioneer Distilleries — through a one-day auction at the stock exchanges.
Mallya also sold a majority stake in USL to British spirits company Diageo Plc for Rs 11,000 crore. However, he has been guarded on using the money to bail out the Kingfisher Airlines, which has been grounded since September 30.
“Each individual company is a public entity. Kingfisher Airlines’ issues will be resolved by Kingfisher Airlines and UB Holdings. It will be unfortunate if you try to link this transaction with the airline. Let’s not cross contaminate everything and interrelate everything,” Mallya had recently said.
According to the Centre for Asia Pacific Aviation (Capa), a fully-funded turnaround for Kingfisher would cost at least $1 billion, or over Rs 5,500 crore.
A week after the UB-Diageo deal was announced, Kingfisher has urged lenders to give it some more time to finalise a revival plan. In a recent meeting with the consortium of bankers, Kingfisher Airlines’ senior management sought a week’s time to submit a turnaround plan. Bankers may invoke their Rs 8,000 crore guarantee to the airline if they are not satisfied with the revival plan.
Meanwhile, officials of the revenue department said they were working on a comprehensive plan to recover tax dues from the airline, which owes them more than Rs 200 crore.
Diageo open offer
Diageo Plc will launch its over Rs 5,441-crore open offer in January next year to acquire a 26 per cent stake in United Spirits.
In a filing to the BSE, United Spirits said the open offer would commence on January 7, 2013 and close on January 18.
Diageo will acquire up to 37,785,214 equity shares of face value of Rs 10 each at an offer price of Rs 1,440 per share.