The company said it has suffered "substantial losses" and its net worth has been eroded.
Kingfisher has been asked by its creditors to raise $160 million in equity and the carrier is considering a proposal to sell real estate to help pave the way for a debt restructuring, a banker said on Monday.
The carrier's net loss in the quarter ended September 30 rose to Rs 469 crore ($93 million) from Rs 231 crore in the year-ago period, the company said in a statement to the stock exchanges. Aircraft fuel expenses in the quarter rose 70 percent to Rs 817 crore, it said.
The carrier has become one of the main casualties of high fuel costs and a fierce price war between a handful of airlines which, between them, have ordered hundreds of aircraft for delivery over the next decade in an ambitious bet on the future.
At 10:12 AM, shares in Kingfisher Airlines rose 0.70% to Rs 21.50.
SICOM, the non-banking finance company partly owned by the Maharashtra government, is understood to have emerged as a source of some of the funds being raised by the UB Group to support Kingfisher Airlines. Four companies linked to Kingfisher and the UB Group have collectively borrowed Rs 400 crore from SICOM, in which the state government holds 49% equity.
Banks will take control of the cash flow of Kingfisher Airlines - a harsh step that lenders rarely take to protect their exposure. They will put in place a mechanism where the airline's earnings will flow into one bank account that will be closely tracked to avert loan defaults. The decision was taken by the lenders at a hurriedly called meeting last week as the Vijay Mallyapromoted airline hit the headlines after it cancelled 200 flights and sought government help.
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