Mallya defends Kingfisher and tries to soothe investor concerns

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Mallya defends Kingfisher
The chairman of Kingfisher Airlines, Vijay Mallya, made statements to allay the fear of his investors and company shareholders that the company is not in as serious a trouble as the recent report by Veritas had stated it to be.

During the 16th Annual General Meeting of the company, the chairman came out with a point-by-point clarification of the recent questions that were raised by investing community.

He said the promoters could inject more funds into the airlines. He also said that the Kingfisher’s parent company, UB Holdings, has given a corporate guarantees of Rs 9,000 crore for the airlines.

Mallya also said, "The total investment by UB Holdings till date in the form of shares is Rs 2118 crore. This includes a sum of Rs 745 crore which was converted, alongside the banks into preference shares and thereafter into ordinary equity shares at the SEBI specified price. Besides this, UB Holdings has also procured third party finances from associates by way of optionally convertible debentures amounting in all to Rs 710 crore."

The company also announced that it will shut down its low cost airline service. There were some other measures also that the company will undertake in order to reduce losses.

VIEW: Our view of the company has not changed. Value and fundamental investors should clearly stay away from the company. For momentum investors also there is no opportunity in the stock for now. They should stay clear as the stock will be extremely volatile with negative bias.

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