Source : PTI | Sep 30, 2011, 11.15AM IST
Working hard to lower its debt and interest costs, Kingfisher Airlines got guarantees worth over Rs 6,100 crore from Chairman and key promoter Vijay Mallya last fiscal toward loan and other liabilities.
For providing the additional level of collateral for its funding needs, the company paid a little over Rs 50 crore to Mallya as 'guarantee and security commission' during the year ended March 31, 2011, Kingfisher has told its shareholders.
Mallya had also furnished guarantees totalling Rs 2,799.56 crore in the previous fiscal (2009-10) on behalf of the company for loans and other liabilities, but did not get any commission that year.
The airline disclosed the guarantees worth Rs 6,175.63 crore provided by Vijay Mallya and the commission totalling Rs 50.87 crore paid to him in its Annual Report for the year 2010-11, which was made available to shareholders ahead of its AGM on Wednesday in Bangalore.
The company did not reply to detailed queries regarding the need for collateral from Mallya and the exact details of the loans and other liabilities for which he had to furnish his personal guarantee.
However, Vijay Mallya told shareholders during his address at the AGM that he "personally stepped in to provide a third level of comfort to the lenders who have been extremely supportive of Kingfisher."
Kingfisher, which claims to be the country's single largest airline with a market share of about 20 per cent, is taking various steps to improve its operating performance and as part of these efforts, has decided to phase out its low-cost service, Kingfisher Red, in about four months.
Mallya said the company has implemented a debt-recast programme to lower its debt liabilities and Kingfisher was continuing to work with the consortium of banks with a view to further reduce interest costs.
In an investor presentation in June this year, the company said that its total debt before the recast stood at Rs 7,651.12 crore and came down to Rs 6,007.30 crore after the recast.
"The banks have not only given relief to Kingfisher in the form of a moratorium on repayment, extended tenor of loans and reduced interest rates but also converted 30 per cent of their outstanding loans into preference and equity capital," Mallya said.
"By the same measure, I, too, have given my personal comfort to the lenders over-and-above the securities provided by the company and the additional collateral of UBHL guarantees," he added.
For providing the additional level of collateral for its funding needs, the company paid a little over Rs 50 crore to Mallya as 'guarantee and security commission' during the year ended March 31, 2011, Kingfisher has told its shareholders.
Mallya had also furnished guarantees totalling Rs 2,799.56 crore in the previous fiscal (2009-10) on behalf of the company for loans and other liabilities, but did not get any commission that year.
The airline disclosed the guarantees worth Rs 6,175.63 crore provided by Vijay Mallya and the commission totalling Rs 50.87 crore paid to him in its Annual Report for the year 2010-11, which was made available to shareholders ahead of its AGM on Wednesday in Bangalore.
The company did not reply to detailed queries regarding the need for collateral from Mallya and the exact details of the loans and other liabilities for which he had to furnish his personal guarantee.
However, Vijay Mallya told shareholders during his address at the AGM that he "personally stepped in to provide a third level of comfort to the lenders who have been extremely supportive of Kingfisher."
Kingfisher, which claims to be the country's single largest airline with a market share of about 20 per cent, is taking various steps to improve its operating performance and as part of these efforts, has decided to phase out its low-cost service, Kingfisher Red, in about four months.
Mallya said the company has implemented a debt-recast programme to lower its debt liabilities and Kingfisher was continuing to work with the consortium of banks with a view to further reduce interest costs.
In an investor presentation in June this year, the company said that its total debt before the recast stood at Rs 7,651.12 crore and came down to Rs 6,007.30 crore after the recast.
"The banks have not only given relief to Kingfisher in the form of a moratorium on repayment, extended tenor of loans and reduced interest rates but also converted 30 per cent of their outstanding loans into preference and equity capital," Mallya said.
"By the same measure, I, too, have given my personal comfort to the lenders over-and-above the securities provided by the company and the additional collateral of UBHL guarantees," he added.
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