Kingfisher allots equity shares against optionally convertible debentures

Cash-strapped Kingfisher Airlines said it has alloted equity shares against optionally convertible debentures (OCDs), a development that may help in saving interest outflow on such instruments.

In a filing to the BSE, Kingfisher said it has issued a total of 3.56 crore equity shares to Star Investments Pvt Ltd and Amar Nath Jhunjhunwala at a price of Rs 23.63 a share in lieu of conversion of debentures.

"The board has issued 30,300,000 equity shares to Star Investments Pvt Ltd arising out of conversion of 7,159,890 OCDs and 5,342,361 shares to Amar Nath Jhunjhunwala of 1,262,400 OCDs at a price of Rs 23.63 per share...," the company said in a statement.

In January last year, Kingfisher had allotted over 7 crore optionally convertible debentures (OCDs), having an interest rate of 8 per cent, to the entities.

"Post allotment, the paid up equity share capital of the company stands increased to Rs 613 crore from Rs 577 crore," the company said.

The conversion of OCDs to equity shares will help Kingfisher reduce its debt burden as it will save on the 8 per cent interest cost.

Kingfisher, which suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore, posted a Rs 444 crore loss in third quarter this fiscal.

Shares of the Kingfisher Airlines are down 0.25 per cent at 19.90 per piece on the BSE at 11.25am.