Kingfisher Airlines virtually Grounded by Debt and Share Price sinks below Rs 20…Fears come alive of Borrowing on the Brand

Kingfisher Airlines…Fears come alive of Borrowing on the Brand….The struggling Airline is virtually grounded with Heavy Debt … some taken even against the Brand…..Pilots are leaving enmasse and flights are being cancelled daily…Share Price has sunk below Rs 20

http://www.hindustantimes.com/News-Feed/SectorsAviation/Kingfisher-seeks-Govt-bailout-40-more-flights-cancelled/Article1-767695.aspx

Management and Mallya are putting up a Brave face…will have to quickly come up with atleast Rs 500 crs and in the next few months raise over Rs 1000 crs to stay in the Air…With the Intangibles Channel of the Brand now being exhausted to raise funds,the only way for Mallya is to either sell out the Airline or sell or pledge Group Assets to raise funds

The King of Good Times is now begging the Government to bail his Airlines out in Pauper Times !…Ironic !…hope the Government does not fall for this again !….Of course there is a larger Picture involved to support our Aviation Industry but First the King needs to infuse some more himself by leveraging or selling his Group Assets…IPL…Formula One…Kingfisher and United Group Real Esate Assets…their kingfisher dhun “Oooh la la la la aey oh!” has whittled down to just “Aey Oh!”….and I’ll let you on to something here…the last time the Banks lend to the Airlines,the Agreed Arrangement Fees to an Intermediary related to one of the Lender Banks was not paid in full…in fact was reduced from Rs 20 crs to just Rs 1.5 crs….Now ! Now !…more than meets the eye here too !

Had warned in July 2009 that while Borrowing on the Brand was interesting,it did throw up some huge risks

No Airline…No Brand !….How then would a lender against the Brand, State Bank of India recover it’s dues of @ Rs 2000 crs !…What good is the Brand in such a situation !…you can’t sell it to a rival airline ! can you ! ?

Check out earlier Blogs on this

Auditors warn of ‘Kingfisher Airlines’ being a ‘going concern’ problem in the making!

Thursday, September 15th, 2011

Borrowing against Brands !…Interesting,but Risky area opening out !

Thursday, July 23rd, 2009

Some Wednesday Wanderings !…May’s Heat Wave causing a Lot of Bouncing !…Kingfisher Airlines Cheques…Adnan Sami…Tata’s JLR Debt woes forcing sale of TCS Shares…and our Sensex !

Wednesday, May 6th, 2009

 

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