Mumbai, Aug. 26: Two airlines — Kingfisher and SpiceJet — are looking to raise funds to stabilize their businesses.
The board of Kingfisher Airlines today gave its green signal for a Rs 2,000-crore rights issue, while SpiceJet said it would issue preferential shares to promoter Kalanithi Maran.
SpiceJet told the bourses that its board had decided to issue 3.59 crore shares to Maran on a preferential basis at a price to be determined by Sebi regulations. The company will place a special resolution before shareholders seeking their approval at the annual general meeting on September 29.
The board of Kingfisher met on Thursday and decided to come out with a rights issue of up to Rs 2,000 crore. The airline did not divulge the time frame for the flotation.
The rights offering is being seen as an attempt by the company to bring down its Rs 6,000-crore debt. The company, which had a net loss of Rs 263 crore on a revenue of Rs 1,882 crore in April-June, has been trying to raise funds through a global depository receipts issue of $250-350 million.
The airline, which had earlier issued debentures worth over Rs 700 crore to three firms acting in concert with the founders, said in the announcement that these optionally convertible debentures (OCDs) would be redeemed prior to the rights issue in one or more tranches at the option of the board.
In the event the rights issue has not occurred during the relevant period, these OCDs will continue according to their original terms and may be redeemed at the end of 18 months from allotment.
The news did not provide any ballast to these stocks. On the BSE, the Kingfisher share fell over 6 per cent to Rs 23.55, while SpiceJet dropped over 4 per cent to close at Rs 21.75.
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