fm kingfisher

7/29/2019 FM Kingfisher

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Kingfisher Case study

Arun Anjana C-36

Safal Acharya C-37

Saurabh Tyagi C-38


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History

Founded in 2003

Commenced business in 2005

Fleet of 4 planes to 64 in 2011 Acquired stake in Deccan aviation in

April 2008

71 destinations 2nd largest airline till Dec 2011


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The Good Times

One of the only seven airlines awarded 5-starrating by SKYTRAX

Kingfisher will join the Oneworld Airline

Alliance on February 10th 2012

NDTV Profit Business Leadership Award for

Aviation

India's No. 1 Airline in customer satisfactionby Business World

In May 2009, Kingfisher Airlines carried more

than 1 million passengers


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The journey so far.

particulars 2011 2010 2009 2008 2007

Net worth -2,951.19 -3,898.45 -2,125.34 198.88 384.70

Total debt 7,057.08 7,922.60 5,665.56 934.38 916.71

Total assets 4,105.89 4,024.17 3,540.21 1,133.26 1,301.40

Total Income 6,314.96 4,314.62 5,868.07 1,569.90 2,142.31

Interest 2,340.32 2,245.59 2,029.33 434.44 466.05

PAT -1,027.40 -1,647.22 -1,608.83 -188.14 -416.58


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The Problem

Acquisition of Deccan airlines

Expanding business beyond capacity, finance

could not support Increased interest and debt

Increasing liabilities

Power and Fuel cost rose from 979.50 in 2007

to 2,274.03cr in 2011

High competition in the sector


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Troubled Times

Huge debt

Eroded market capitalization

Cash shortage Flights grounded

Accounts frozen

Declared NPA by lenders

Survival fears


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Banks exposure to debt

Other banks include- ICICI bank, Central bank of

India, United bank of India, UCO bank and

Corporation bank.

Bank Amount in crore Status

SBI 1,457.78 Termed NPA

IDBI 727.63 Termed NPA

PNB 710.33 Termed NPA

Bank of India 575.27 Termed NPA

Bank of Baroda 537.51 Termed NPA


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Steps taken

Stopped its low-cost carrier Kingfisher Red

Airlines imported fuel directly to avoid sales

tax levied by the states Headcount stood at 7,317 on 31st march

2011 down from an average of 7,681

Believed to cut 2,000 jobs by July would operate 40 planes out of its 64-strong

fleet


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Debt Restructuring

Rs750.10cr converted into cumulative

redeemable preference shares Rs553.10cr as non-convertible cumulative

redeemable preference shares to be

redeemed after 12 years Scheduled to repay loans to SBI from

September 2012


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Security given by Kingfisher

Personal Guarantee of 248.97cr by Mallya

Corporate Guarantee of 1,601.43cr by United

Breweries Holdings

Pooled collateral security of 5,238.59cr

includes Kingfisher House, Kingfisher Villa,

hypothecation of choppers and brand

Kingfisher


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The way out..

Reduce the number of Aircraft

Fly in Tier 2, tier 3 cities

Place the expansion plans on hold

Dynamic Pricing

Re-appeal to the government for the Second Debtrecast plan

Focus on Business Class passengers as theyaccount for 48% of passengers and approximately66% revenue for Indian Aviation Sector


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Institutional Investor

FDI up to 24% by Foreign players

Raise funds abroad

Indian Investor

Merger

Other Options.


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Thank You

fm kingfisher

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