Kingfisher Debt Crisis

Code : FCF0021

Year :
2012

Industry : Aviation Industry, Airline Industry

Region : India

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:Kingfisher Airlines, a leading Indian private airline , faced a serious financial crisis in November 2011. The airline, which had not made a profit since its inception, went through debt restructuring once in March 2011 in the form of a bailout package from a consortium of 13 banks that included State Bank of India and ICICI Bank. Even after the debt restructuring and infusing of fresh capital in the form of an additional debt of Rs. 12.12 billion from the consortium of banks, the airline found itself unable to overcome the problem and reported a net loss of Rs. 7322.10 million during the first six months of the FY 2012. For FY 2011, the airline had accumulated losses of 102.74 billion and more than fifty percent of its net worth had been eroded. The cash-strapped and bleeding airline cancelled 175 flights out of the 418 allotted for the Winter Schedule, which included four international flights to Bangkok. According to the Center for Asia-Pacific Aviation (CAPA) chief executive, Kapil Kaul (Kaul), the airline urgently required capital infusion of $400 million, including an immediate $200 million to maintain its daily operations...

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