Kingfisher shares rise on prospects of stake sale

Markets were rife with speculation that the govt will come out with a civil aviation policy

Written by ENS Economic Bureau | Mumbai | Published: April 5, 2012 1:04 am

Troubled carrier Kingfisher Airlines (KFA) saw its share price jump by 11 per cent on Wednesday in a weak market to close at Rs 18.5 per share as talks of allowing 49 per cent strategic stake sale to foreign airlines gathered momentum. The shares have risen by 23.75 per cent since Monday.

Markets were rife with speculation that the government will come out with a civil aviation policy on Monday,which might allow strategic sale of up to 49 per cent in domestic carriers to foreign airlines.

There were also talks of Singapore Airlines showing interest in buying stake in KFA.

“KFA was in action on the buzz that civil aviation policy will be out on Monday allowing 49 per cent stake sale in domestic carriers. Singapore Airlines,Tata Group and few others are speculated to be interested in the KFA,” said Kishor P Ostwal,CMD,CNI Research.

A government official said that there are some American airlines who are also interested in investing in KFA.

The airline with a debt of over Rs 7,000 crore witnessed a sharp fall in its share prices last week as the airline’s employees including pilots threatened to go on strike following non-payment of salaries over the last four months.

The employees demanded immediate payment of salaries.

While this could have stalled the operations of the airline,the talks of the new aviation policy and stake sale seems to have given some relief to the markets as it will help the airline raise some funds that it needs immediately.

Kingfisher junior staff get part of salaries

After a long wait of four months,a section of employees of crisis-ridden Kingfisher Airlines (KFA) on Wednesday received part of their pending salaries. “Some of the junior staff have finally been paid… but they have received only one-month basic salary,” an airline staffer said. The payment comes following KFA chairman Vijay Mallya’s assurance on Monday that salary dues would be paid in a staggered manner by April 10.

PTI

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