Today, the shares of Kingfisher Airlines sank by over 11 per cent to an all-time low of Rs. 7.40 sending shivers amongst its investors. This is the ninth continuous day of fall of Kingfisher’s share price.
The steep fall came amidst the strike call given by Kingfisher’s staff to protest against the non-payment of salaries for several months. LKP Mercant Financing decided it has had enough of the Vijay Mallya – Kingfisher mess and dumped 93.60 lakh shares of the airline, booking a staggering loss in the process.
Vijay Mallya decided to respond to his employees’ threat in a belligerent manner. He dashed off a letter telling them in so many words that he was paying from his pocket to keep the airline afloat and if the employees did not want to stay, they could as well take a hike. “Why should I spend everyday to keep our airline afloat if the actions of our own colleagues lead to loss of guest confidence and lower income by cancellation of flights or low load factors that result from uncertainty? What is the confidence that I can give to investors who I am in dialogue with?” he asked emotionally.
“Every day, I have to write cheques … irrespective of the revenue inflow” emphasized Mallya to the employees.
Vijay Mallya also sent a not-so-veiled threat that he would close down the airline stating “If some colleagues feel that I will be pressurized by flight cancellations, they are wrong. Instead, I will stop my own support as a few are effectively holding the entire company to ransom.”
Mallya also got into an eyeball-to-eyeball confrontation with the employees by asking them to get out of the airline if they were not happy “If a section of our colleagues feel that their actions are justified and that they know best, they can elect to leave our company.”
Meanwhile, while the beleagured investors of Kingfisher Airlines are resigned to their fate, the bankers and lenders are a worried lot. If Kingfisher Airlines goes bankrupt, their chances of recovering any part of the Rs. 7,500 crores lent to the airline also goes bust.