The Hindu Business Line : CIAL to allot 26 pc equity to Hudco

AS the Cochin International Airport Ltd (CIAL) is set to get out of the red by next March, the company management has started voicing the need for listing its shares on all the major stock exchanges for future expansion.

The CIAL board of directors on January 20 has decided to allot 26 per cent of its total equity of Rs 200 crore to Hudco, the major financier of the airport project, and has cleared the way for the Hudco to convert Rs 52 crore of loan, out of the outstanding loan of Rs 129 crore , to equity.

Mr C. Babu Rajeev, Managing Director, CIAL, told Business Line that the company would intimate its decision to Hudco and with this all the outstanding issues with it would be settled.

Already shares worth Rs 140 crore have been subscribed and after the subscription by Hudco it would touch Rs 192 crore leaving only Rs 8 crore to be allotted, he said.

Equity participation by the Hudco would reduce CIAL's interest burden substantially. Hudco had already agreed to waive penal interest apart from reducing the interest rate to 11 per cent, he said.

CIAL had already repaid Rs 66 crore principal and around Rs 25 crore towards interest to State Bank of Travancore, Federal Bank, and District Cooperative Bank to liquidate the loans taken from them.

CIAL hopes to raise its revenues following the increase in the number of flights and the consequent increase in passenger and cargo traffic and other non-aeronautical operations such as the duty free shop.

The operational surplus had gone up from Rs 9.56 crore in 1999-00 to Rs 32.47 crore in 2001-02. During the current fiscal it is estimated at Rs 36.5 crore. The company had projected a profit of Rs 1.01 crore for the first time by the end of the current fiscal, he said. However, it might go up to Rs 4 crore. Currently, there are 135 flights per week from here as against 62 in 1999. The passenger traffic has increased from 4,95,902 in 1999-00 to 8,32,859 in 2001-02.

During the current fiscal up to November 2002 it stood at 6,48,891 (3,77,237 international and 2,71,654 domestic).

From March Qatar and Saudia Airlines would begin their operations from here while the SriLankan airlines will begin operations from late April, he said.

There is a feeling in the management of late that, given its ideal location and growth trend, the airport might have to go for expansion in the near future, Mr Rajeev said. "Today the company is getting more funds and it is now on a strong financial footing."

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