Kingfisher slumps 18% but pares losses later

Shares of Vijay Mallya-led KingfisherAirlines on Friday slumped by as much as 18 per cent on the bourses, beforerecovering most of the lost ground, amid concerns over limited clarity in theair carrier's fund raising plans to lower its debts and cut operational costs.

The stock settled at Rs 24.05, down 3.61 per cent, at theBSE. Earlier in the day, it had plunged by as much as 18 per cent to touch alow of Rs 20.50.

But, select buying at lower levels helped the Kingfishershares pare most of their intra-day losses.

The marketmen said that the stock fell amid growing concernsabout the cash-strapped carrier's ability to mop-up immediate capital to fundits operations and repay the debts.

A media report today quoted Kingfisher Chairman Vijay Mallyaas saying that the airline was close to sealing a $370 million deal with anIndian private investor and a consortium of banks to save the airline.

However, Mallya himself later wrote on the social networkingsite Twitter that the report was "factually wrong".

He, however, did not elaborate any further.

At the NSE, the stock ended at Rs 23.90 a piece, down 4.40per cent from the previous close. During the intra-day trading session,Kingfisher Airlines tanked by 17.8 per cent to Rs 20.55 a share at the NSE.

Earlier this week, the airline reported that its lossesdoubled in the September quarter on account of high fuel costs and hascancelled several flights over the past few weeks.

The stock had hit an all-time low of Rs 17.55 on November 11amid concerns over its mounting debt worries and surging fuel costs, interestpayments and other expenses.

After announcing the results, Mallya had said on November 15that the airline has sought help from banks to raise short-term funds to thetune of Rs 700-800 crore as working capital, interest concession, and alsoruled out its closure.

 

He also said that the company plans to raise Rs 2,000 crorethrough rights issue and was seeking government approval for direct import ofjet fuel to reduce fuel costs.

 

These announcements, as also speculations about a largeindustrial house being interested in buying a stake, helped the Kingfishershares stage a rally of 18 per cent a day later on November 16.