The IPO would open on 29th July and close on 30th September
Copper-gold and base metals explorer Mogul Resources, which has three highly prospective projects in India, plans to list on the Australian Securities Exchange (ASX) in October.
Mogul launched an Australian dollar (A$)7.5 million public share offer "to pursue exploration across a portfolio of Indian resource projects," the firm said in a statement. The company, which currently has licence to mine for minerals in three states, has applied for another 15.
The IPO, where 37.5 million fresh shares are being sold at an issue price of A$0.20 a piece, would open on 29th July and close on 30th September. The company plans to list on the ASX around 21st October. Listing on ASX would enable it to launch an aggressive exploration and drilling campaign, initially at the Pali Project-located in mineral-rich Rajasthan. The region boasts of several lead-zinc mines and produces most of India's copper and lead-zinc output.
"Mogul has assembled three key projects-Rajasthan (coper-gold, lead-zinc), Karnataka (gold, base metals) and Andhra Pradesh (base metals)-all of which are considered prospective and offer significant potential for the discovery of new deposits," it said. Its managing director Harjinder Kehal, said the exploration scene in India was at a stage where Australia was in the 1980s.
"India has a very favourable geology with Archaean greenstone belts similar to the Yilgarn and Proterozoic terrains of Western Australia, combined with a rapidly growing domestic market for minerals underpinned by an economy whose growth is surpassed only by China," he said. Mogul will first focus on the Sandarla prospect within the Pali Project, a large multi-element mineralised zone.
"Follow-up soil sampling, including both extension and in-fill sampling was completed in April 2011, with results awaited. Drill testing is scheduled to commence in December 2011 quarter following the IPO listing," the statement said.
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Services disappear—no more ‘world class’ gourmet cuisine and dwindling on-flight facilities—as the carrier is finding it difficult to get on top of its mounting debt pile. How long will the carrier’s customer support keep the show going on?
Kingfisher Airlines has been known for its superb customer service. However, the airline seems to have cut down on some other on-flight services as it reels under a burgeoning debt. World class gourmet cuisine promised by Dr Vijay Mallya? Many of their flights now don’t carry non-vegetarian food—a gentle face intoning “May I offer you a vegetarian meal?”
Even the famed business class does not deliver what the menu promises. Behind-the-seat in-flight entertainment systems? They don’t function in many cases, probably because Kingfisher has stopped paying the TV channels. And many flights now don’t feature the business class—despite them not being budget flights belonging to the ‘Kingfisher Red’ category.
Currently, the company has a debt of Rs Rs6,200 crore, as Ravi Nedungadi, group president and CFO, Kingfisher Airlines, declared in a TV interview in May this year.
The company has been talking about debt restructuring since long to stall payments, but the exercise has cost 11 public banks Rs1.65 crore as the value of their equity holding in the company has undergone continuous erosion.
A major chunk of this debt consists of overstretched oil dues. Surprisingly, despite having defaulted consistently on this count, the company has managed to get repeated extensions from state-owned oil companies, which has amounted to a huge loss in revenue. The oil marketing companies grumble intermittently, but the matter is resettled soon after.
The latest instance of Kingfisher’s flights being grounded at New Delhi on 18th July proved to be another token interruption in the four-year old routing. Hindustan Petroleum (HPCL) refused to supply fuel unless Kingfisher cleared its outstanding dues, but the operations resumed after a while. Kingfisher has defaulted in payments to many fuel suppliers, airport authorities, banks and other entities on various issues, but manages to get credit extensions repeatedly.
Kingfisher Airlines refused to comment on the issue, and repeated phone calls to HPCL’s corporate office elicited no response.
On 18th July, Kingfisher Airline’s dues for Hindustan Petroleum (HPCL), the supplier of aviation turbine fuel (ATF), stood at a staggering Rs702.88 crore. Purchase receipts issued from SBI (State Bank of India), Axis Bank and UTI show that between 30th June and 18th July, Kingfisher’s ATF bill stood at Rs156 crore.
When HPCL put Kingfisher on the cash & carry model in June 2010, the credit limit on the bank guarantee was fixed at Rs300 crore. “Purchase orders have to be placed a day in advance. If the amount falls within the credit limit, it gets cleared immediately, but for dues exceeding the limit, it gets marked as ‘credit hold’. Only the topmost officials of HPCL can override that and extend the dues,” said HPCL’s former chief sales manager Ravi Srivastava.
This year, while closing its annual accounts, HPCL asked Kingfisher to clear the overdue amount. Kingfisher submitted a cheque of Rs200 crore, dated 31.3.2011, but it bounced on 4.4.2011. Mr Srivastava had also approached the CVC (Central Vigilance Commission) about this matter. After it showed on its website that the case was being investigated till May 2011, the watchdog abruptly declared that the case was closed in July 2010.
HPCL had issued many warnings earlier, which have been followed by ministry directives for payment of dues and then an unexplained extension. The oil ministry had directed HPCL to invoke United Breweries’ Rs250 crore corporate guarantee in March 2010 for recovering dues, but the issue was sidelined because the move entailed a tiresome legal process. After that, HPCL shifted to a bank guarantee.
Kingfisher used to get ATF from Indian Oil and Bharat Petroleum. The former invoked the bank guarantee in 2008, and BPCL dragged Kingfisher to court in 2009. But the parties went for an out-of-court settlement later, which entailed Kingfisher to pay Rs10 crore per month to the company.
Kingfisher is a defaulter on multiple counts. In 2009, Kingfisher settled an
out-of-court settlement with German MRO firm Lufthansa Technik of Lufthansa Group—a case on non-payment of dues for repair and maintenance jobs done on Kingfisher aircraft by the vendor. In May 2010, IDBI Bank recalled a Rs750 crore loan after Kingfisher failed to stick to its repayment schedule.
Kingfisher Airlines has never managed to make a profit since its launch in 2005. Apart from oil dues, Kingfisher also owes the Airports Authorities of India (AAI) an amount close to Rs200 crore. It was reported a few days ago that AAI was threatening to encash undated cheques worth Rs130 crore from Kingfisher unless the airline pays up its dues. It owes the Delhi and Hyderabad airports together some Rs 93crore, as Sidharth Kapur, CFO, GMR Airports, had said in a recent interview.
What remains impressive still is the quality of Kingfisher employees. Kingfisher may be burdened with debt. But you cannot make that out from the quality of customer service. Here is the recent experience of Moneylife’s Editor: (See Kingfisher’s Customer Support: http://www.moneylife.in/blog/2011/07/kingfishers-customer-support/)
The customer-support is efficient, polite and ever helpful. Hope that, at least, lasts a long time.