KANNUR: Kannur International Airport Ltd (KIAL), currently burdened by its expanding accumulated losses and a rapidly shrinking net worth, is set to improve its financial outlook through monetisation of its extensive land bank.
Kannur Airport has acquired significant area of land bank in Mattannur in Kannur, most of which currently is lying idle as the airport as a project couldn’t make much headway financially ever since its commercial operations commenced in 2018.
The managing director (MD) of KIAL, Dinesh Kumar, addressing the shareholders recently said that a detailed land monetisation plan has been presented to the board, and once the approval is in place, KIAL will commence its action plan to monetise it.
“KIAL’s finances are currently in poor shape though it has secured some breathing room after REC Ltd decided to take over its loans in excess of Rs1,000 crore, with a much relaxed repayment terms than its original lenders – Canara Bank, Federal Bank and South Indian Bank (SIB),” said a finance expert in an interview with businessbenchmark.news.
FY24 loss
With yet another loss of Rs168.56 crore recorded by KIAL for the financial year 2023-24 (FY24), the company’s accumulated losses have surged to Rs742.77 crore.
This has landed KIAL in a financially precarious situation as the latest loss has further drained the company’s net worth to that extent.
And, as of end-FY24, the net worth or total equity, of the company, stood at Rs596.97 crore, which is less than half of its paid up capital of Rs1,338.38 crore.
Moreover, the company’s total borrowings have grown to Rs1,165.61 crore, with the non-current loans alone amounting to Rs1,124.90 crore.
“The restructuring of KIAL’s loan with the help of REC Ltd may have given some respite to the company in terms of interest rate as well as loan tenure. But how long will it last?” remarked the financial controller of a bank.
Pinarayi Vijayan as KIAL chairman
Meanwhile, Pinarayi Vijayan, the Kerala Chief Minister, who also serves as the chairman of KIAL, said he discussed with the Prime Minister, Narendra Modi, the possibility of KIAL being granted the point-of-call status to allow international airlines to operate at KIAL.
There are views expressed by top aviation experts including the former MD of KIAL, V Thulasidas, that allowing international airlines to operate from KIAL could transform the airport’s prospects.
The present MD, Dinesh Kumar, who ruled out any near term possibility of initial public offering (IPO) by the company, and audit by CAG, said the company may consider raising capital through private placement of shares, if needed.
He added that with an authorised capital of Rs3,500 crore, KIAL has sufficient headroom to increase its paid up capital from the present Rs1,338.39 crore.
