In an attempt to bail out ailing Kingfisher Airlines and reduce the exposure of its lenders, its parent United Breweries Holdings Ltd. has sought shareholders’ approval through postal ballot to provide additional loans of Rs.450 crore to the grounded airline.
The company, as per Section 192A of the Companies Act, 1956, has sought shareholders’ nod to raise the limit of its loans to the airline to Rs.750 crore from the present limit of Rs.300 crore. However, as per the proposal, the total amount of UB Holdings’ exposure to Kingfisher remains at Rs.1,500 crore, as approved earlier. While the limit for loans has been increased to Rs.750 crore from Rs.300 crore, the limit for investment has been reduced to Rs.750 crore from earlier Rs.1,200 crore.
Last week, Kingfisher’s lenders had threatened to recall the Rs.7,000-crore loan and to initiate debt recovery measures after the airline failed to come up with any credible plan to restart operations and to pay back dues.UB Holding shares, on Monday, closed with a loss of 3.78 per cent at Rs.61.05 on the BSE while Kingfisher Airlines stock gained 4.92 per cent to close at Rs.10.03.
Jet shares crash
On the other hand, Jet Airways stocks plunged by 7.70 per cent to close at Rs.570.75 on the BSE after Etihad Airways reportedly said it would take more time to decide on the share purchase deal and it might revise the offer.