Kingfisher Airlines seeks higher corporate guarantees from UB Holdings

United Breweries Holdings is seeking shareholder to increase its exposure, in the form of financial guarantees and security, to Kingfisher Airlines from Rs 7,500 crore to Rs 12,000 crore.

Kingfisher will use this to secure loans for a wide range of activities, both for funding its domestic and international operations. It can use it to secure working capital facilities, capital expenditure, aircraft acquisition and corporate restructuring activities too. Private airlines in the country are suffering from the effects of a slowdown in passenger traffic, normalisation of ticket fares, over-optimistic business plans, acquisitions that left them bloated with debt and oil price hedges that have gone wrong. The extended guarantees from United Breweries Holdings will allow Kingfisher tide over its liquidity constraints.

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