Kingfisher down 2%; co says all flights on schedule today
Shares of Vijay Mallya-promoted Kingfisher Airlineswere down 1.6% to Rs 39, as the debt-ridden carrier struggles to pay its fuel bills. On Monday evening,Hindustan Petroleum Corporation refused to refuel Kingfisher planes for non-payment of dues, leading to a dozen flights being grounded. Kingfisher owns the state-owned oil marketing company around Rs 650 crore.
A Kingfisher spokesperson told moneycontrol.com that all domestic flights were flying on schedule today.
On the reason for the stock not falling sharply, Ajay Parmar, head of institutional research, Emkay Global Financial Services told moneycontrol.com that the stock had been ignored in the recent market rallies, and so was not over-owned by investors.
“Besides, there is a curb on Kingfisher futures. So traders cannot short sell it,” he said.
A future being placed in the ‘curb list’ of the NSE means that traders cannot initiate any fresh position (buy or sell) in it. Of the 121 trading days so far this year, KFA has been in the curb list for 57 trading days.
Earlier this year, Kingfisher had implemented a debt recast plan, under which roughly 30% of its debt was converted into shares. The shares were issued to its lenders and founder companies, and the tenure of the remaining loans was extended. The recast helped the airline cut the debt on its books to Rs 6,007 crore from Rs 7,651 crore last year.
Portfolio manager, P.N Vijay said, “It will take some time for Kingfisher to improve its balance sheet; investors need to be careful before buying the stock”
Kingfisher has never made a profit since its inception in 2005. Its net loss was Rs 1,027 crore for FY11 on a total income of Rs 6,496 crore, against a net loss of Rs 1,647 crore on a total income of Rs 5,271 crore the previous year. The airline’s plan to raise $300 million through a global depository receipt (GDR) issue has been unsuccessful so far.