At the end of a day full of meetings to salvage Kingfisher Airlines, Vijay Mallya met Suman Layak and Geetanjali Shukla at his office in Nariman Point, Mumbai. It was so late that by the time the interview ended, the clock had ushered in a new day. Through much of the interview, the liquor baron sipped red wine and smoked his favourite cigars. Edited excerpts:
On finding a strategic investor for Kingfisher Airlines:
Without waiting for policy change and FDI, my priority has been to recapitalise the airline with equity and not with more debt. I am in discussions with an investor who has made me a proposal that could be upward of Rs 1,000 crore. I have applied to banks for working capital worth Rs 600 crore, which will be secured by current assets. There will be a dilution of stake.
On the way to cut costs:
In December 2010 when the banks appraised our viability, we were clearly viable at 11 per cent rate of interest. Now that rate has gone up to 14 per cent. So we have to reduce our interest cost. I want to take back the maintenance deposits with our lessors and give them bank guarantees. I will take that Rs 1000 crore or so and use it to reduce debt. That will shave Rs 140 crore from the interest burden. And I also want to take the benefit of the 15 per cent cash discount offered by the Airports Authority of India and pay them cash instead.
On using United Breweries to bail out Kingfisher:
|For a more detailed interview go to www.businesstoday.in/mallya|