Vijay Mallya-led loss-making air carrier Kingfisher Airlines will
need to infuse more funds if its wants to stay afloat, its auditors said.
Noting that the
networth of the airline has been "completely eroded", Kingfisher's auditor BK Ramadhyani & Co said it would need fresh funds to meet its obligations.
"The financial statements of the company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded."
Kingfisher's Q1 loss at Rs 264 crore "The appropriateness of the said basis is interalia dependent on the Company's ability to infuse requisite funds for meeting its obligations," according to the comments of the auditor which forms part of the annual report for 2010-11.
The audit report also pointed out that the company's accumulated losses at the end of the financial year were more than 50 per cent of its networth.
"The company has incurred cash losses during the financial year and in the immediately preceding financial year," it said.
Kingfisher Airlines, however, said it has already obtained long-term funds amounting to more than Rs 475 crore and is exploring various
options of external funding.
"Since the start of the year, long-term funds amounting to over Rs 475 crore has been infused into the company. Simultaneously, the company is exploring capital raising either through GDR or by way of Rights/Domestic Follow-On offering," it said in a statement.
In August, Kingfisher Airlines had informed the Bombay Stock Exchange that its board has approved raising of Rs 2,000 crore through a rights issue.
In the the quarter ended June 30, the net loss of the Kingfisher Airlines widened by 40.66 per cent to Rs 263.54 crore, mainly due to increased fuel expenses.
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