Kingfisher Airlines has recast 22 per cent of its Rs 7,651-crore debt by giving its lenders an equity stake in the company. After the recast, the airline's debt stands at Rs 6,007 crore.

The airlines informed the BSE that a total of 13 banks, that had lent it money, were issued 750 million compulsorily convertible preference shares which gave them 116.33 million of the company's equity shares at Rs 64.48, a premium of about 35 per cent to the closing price of the scrip on Wednesday. The scrip closed at Rs 48.05 on the BSE on Wednesday, up 4.57 per cent from its previous close.

Among the 13 banks, State Bank of India got about 5.7 per cent, valued at Rs 182.25 crore. ICICI Bank was allotted 5.30 per cent, valued at Rs 169.9 crore.

The 13 lenders together now hold a stake of almost 24 per cent in Kingfisher Airlines.

With this allotment, the combined shareholding of Kingfisher's promoters, including United Breweries (Holding) Ltd, Kingfisher Finvest India Ltd, UB Overseas and UB Group Chairman Mr Vijay Mallya, has declined to 58.61 per cent from 66.28 per cent.

United Breweries and Kingfisher Finvest, which had given loans to the airline, got a total of 100 million equity shares at Rs 64.48 a share from 648-million convertible preference shares.

After the allotment, the paid-up equity capital of the company has increased to Rs 497 crore from Rs 265 crore.

The debt recast is likely to help attract investors to the airline's intended $250-million global depositary receipt issue. However, the airline is still waiting for better market conditions to launch the issue.

According to Kingfisher Airlines' Chief Financial Officer, Mr Ravi Nedungadi, the unrest in West Asia and rising fuel prices have spooked the markets. He added that the company is ready with the issue and can go ahead with it at even two days' notice.

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