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India’s Kingfisher to sell property to raise funds

MUMBAI — India’s cash-strapped Kingfisher Airlines said on Thursday that it plans to start selling some unused real estate to raise much-required funds.

Two properties are likely to be sold — the airline’s former corporate headquarters “Kingfisher House” in Mumbai and a villa in the resort state of Goa — banking sources said after the airline met all its 17 lenders in Mumbai.

“Kingfisher House has been vacant after the staff moved to new offices. On our own, we had approached banks with a proposal to liquidate this unutilized asset,” Prakash Mirpuri, Kingfisher’s spokesman, said in a statement.

Mirpuri denied media reports that the lenders were planning to start recovering their loans, saying there was “no discussion on commencement of recovery proceedings”.

A quarter of Kingfisher is owned by local banks and some have refused to lend the company more cash unless fresh capital is raised.

The bankers have given a 15-day notice to Kingfisher to take concrete steps to boost its financial condition, the Press Trust of India said.

Analysts say Kingfisher desperately needs at least $600 million to stay in business and pay the amount it owes to suppliers, lenders, other creditors and staff.

The airline, controlled by liquor baron Vijay Mallya, has never posted a profit since its launch in 2005, and has sharply scaled down its operations in recent months, including shutting overseas operations.

Mallya has been unable to find investors who are willing to pump money into the airline. He hopes the government may soon clear a stalled proposal to allow foreign carriers to invest in domestic airlines.

Kingfisher reported a net loss of 11.52 billion rupees ($208 million) in the three months to March — a tripling of losses from a year earlier — and has total debts of at least $1.4 billion.

Kingfisher has been one of India’s worst-hit airlines in an industry — once a symbol of India’s economic progress — now plagued by high jet fuel prices, fierce competition, price wars and shabby airport infrastructure.