Kingfisher drops below face value; breaches historic low

Business

oi-Sneha

By Sneha B K

Published: Wednesday, July 18, 2012, 11:30 [IST]

Shares of cash-strapped Kingfisher Airlines today fell to Rs 9.43, lower than its face value of Rs 10. The stock of the airline has now touched an abysmally low level, after touching a historic high of Rs 335 reached on December 19, 2007.

The debt ridden airline has been facing financial issues for many years now. In recent months Kingfisher Airlines has had to contend with issues like frozen bank accounts, employees on strike, and had to cancel many flights due to protest against the company's failure to pay their salaries on time.

Ever since the airline commenced operations in 2005, it has been reporting losses. Considering recent events, in May 2012, the Income Tax Authorities of India had frozen accounts of Kingfisher due to Income Tax deducted from Employees Salaries not being deposited with the Government since March 2009, apart from non payment of Service Tax.

In June 2012, GVK - India's second-largest airport operator - launched legal proceedings against Kingfisher Airlines, as a series of cheques having issued by the airline bounced. Also there were reports that the lessors have taken back 34 aircrafts of Kingfisher Airlines as it has failed to pay Rs 1000 crore lease rentals.

Vijay Mallya led Kingfisher Airlines had accumulated losses of over Rs 7,000 crore (US$1.4 billion).

With all problems piling up, one would have to wait and see what is the future for the cash- strapped airline.

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