United Spirits Ltd:--
Equity -2009.32 cr
debt :- 1162.08 cr
at 12.5 or more expensive 13% interest rate 152 cr interest annually which is fully supported by the 5 year average PBDIT of the company. So it is well withing it's debt capacity.


Same is the case with United Spirit Breweries so no problem.

Now coming to KF airlines:---
Now let Mr.Mallya keep saying that losses has been reduced to rs 5 cr. Even if we don't give any heed to this let see what is in the hands of lenders and shareholders infect I don't care about KF airlines shareholders because they have put there money in a bad business, But still for United Spirit let's see how it's lenders' money is secured by the assets alone.(I don't know if lending has been completed or is in the talks but still see to the figures):----

KF airlines:--
Equity 192.87 cr
Debt 934.38

Final figures:--

equity 192.87cr
debt 1934cr (After rasing debt)

This debt has to covered by assets for lenders to restict themselves from exercising pledged shares.

Now the fleet of KF airlines include A319/A320/A321, ATR etc and around 71 in service flights.

Lowest Model ATR costs around 12-16mn but I'm considering only 10mn USD. it has a fleet of 27 ATR so the value is Rs 1188Cr.

Lowest model Airbus it has A319 costs around 44mn USD so it has a fleet of around Rs 7700Cr.

Moreover it can make money in trading in aircraft delievery slot. Search internet to get what it really means.

so Infect it is covered well by it's assets even if you take 50% margine of safety. And I don't think any lender will exercise the shares even when it's sure to get it's entire money,from asset sell.


I find no reason that investors should dump this stock. Well let some do but let the others more considerate ones, be aware of the facts and then take decision. These conditions are very rare and investors should take full advantage of this. I don't see any problem with US Business but I do am concern about there airline business which as always been a wealth eroding business but if Mallya can do a turnaround of KF airlines I'm sure this will be a good sign for KF Shareholders.Till then happy investing.