Kingfisher needs funds to stay afloat: Auditors

Kingfisher Airlines, however, said that it has already obtained long-term funds amounting to more than Rs475 crore and is exploring various options of external funding

New Delhi: Vijay Mallya-led loss-making air carrier Kingfisher Airlines will need to infuse more funds if its wants to stay afloat, reports PTI quoting the company's auditors.

Noting that the net worth of the airlines has been 'completely eroded', Kingfisher's auditor BK Ramadhyani & Co said it would need fresh funds to meet its obligations.

"The financial statements of the company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded."

"The appropriateness of the said basis is inter alia dependent on the company's ability to infuse requisite funds for meeting its obligations," according to the comments of the auditor which forms part of the annual report for 2010-11.

The audit report also pointed out that the company's accumulated losses at the end of the financial year were more than 50% of its net worth.

"The company has incurred cash losses during the financial year and in the immediately preceding financial year," it said.

Kingfisher Airlines, however, said that it has already obtained long-term funds amounting to more than Rs475 crore and is exploring various options of external funding.

"Since the start of the year, long-term funds amounting to over Rs475 crore have been infused into the company.

Simultaneously, the company is exploring capital raising either through GDR or by way of rights/domestic follow-on offering," it said in a statement.

In August, Kingfisher Airlines had informed the Bombay Stock Exchange that its board has approved raising of Rs2,000 crore through a rights issue.

In the quarter ended 30 June 2011, the net loss of the Kingfisher Airlines widened by 40.66% to Rs263.54 crore, mainly due to increased fuel expenses.

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