TNI Bureau: Analysing the current situation of the cash-strapped Kingfisher, it is quite obvious that Vijay Mallya may not be able to survive unhurt without Diageo. The excellent but poorly managed Kingfisher airline is struggling to stay afloat since last few months.
Mallya is likely to talk on the much speculated Diageo deal that would help him raise cash and pay off creditors. Hence, the fate of the Kingfisher is still in suspense.
He has said that the carrier is working on a “holding pattern” basis with limited operation, pending policy changes.
The Centre for Asia Pacific Aviation, in its latest report on ‘Analysis of Indian carriers Q1-FY13 performance’, had said that without an investment of about $600 million in the next two months, and access to a further $400 million over the next 12-18 months to fully fund its business plan, Mallya’s Kingfisher Airlines faces an operational shutdown, possibly temporary, to allow it to restructure and re-organize.
Shares of companies owned by Mallya rose after a news report that United Spirits is close to selling a 49 percent stake in Whyte and Mackey in an attempt to deleverage.
Mallya had given guarantees worth Rs 5,904 crore for the carrier’s loans and other liabilities in 2011-12, but did not get any commission for the same because of lenders’ opposition. But he received over Rs 1.4 crore as commission and sitting fees during 2011-12 from the company.
According to the company’s annual report for 2011-12, Mallya had received a commission of Rs 14,269,200 over and above Rs 1, 00,000 of sitting fees.