Vijay Mallya-led United Breweries (Holdings) Thursday said that Kingfisher Airlines has ceased to be its subsidiary after the carrier allotted shares against optionally convertible debentures to certain entities.
The company said in a regulatory filing to the Bombay Stock Exchange (BSE) that it has a high exposure of over Rs.12,215.18 crore in the airline.
"Kingfisher Airlines has ceased to be company's subsidiary as on Feb 18, 2012, consequent upon it alloting shares against optionally convertible debentures," the company said in the filing.
"The company has significant exposure on various counts to Kingfisher Airlines as on March 31, 2012. These include investment in equity/preference capital at Rs.2,118.48 crore, corporate guarantees to banks,aircraft lessors at Rs.8,925.86 crore."
As on Dec 31, 2011, UB Holdings' stake in Kingfisher stood at 40.1 percent, but it declined to 34.55 percent on Feb 18, 2012 after an increase in the airline's equity base pursuant to issue of shares to some entities in lieu of certain convertible bonds.
In another unrelated development, the airline had to cancel nearly 17 flights flights from New Delhi to various domestic destinations as a group of pilots called in sick.
The pilots are said to be protesting against non-payment of salaries, which were supposed to have been paid on May 9. Kingfisher chairman Vijay Mallya had written to the staff assuring them that their dues would be paid on May 9.
In April a group of employees had gone on a flash agitation claiming that their salaries had not been paid even after the management had committed to clear the dues for the last four months.
The cash-strapped airline had suspended operations to several cities in the last week of March and asked its staff to stay at home till it managed fresh funding.
The airline's international operations had been suspended after the International Air Transport Association (IATA) barred the carrier from its inter-airline clearing house and billing and settlement plan accounts due to non-payment of dues.
Kingfisher has a debt of Rs.7,057.08 crore. Its net loss widened to Rs.444.27 crore for the quarter ended Dec 31, 2011 from Rs.253.69 crore in the October-December quarter of the last fiscal.