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Private-sector carrier Kingfisher Airlines said on Friday its board had approved a rights issue of shares to raise up to Rs 20 billion.

The company, promoted by liquor baron Vijay Mallya, gave no timing or details of the proposed issue.

The board also amended the terms for the issue of optionally convertible debentures (OCD) allotted on January 3, the airline said. An investor has the option to convert these debentures into shares at a price set by the issuer.

The move was part of Kingfisher's debt restructuring issue, which helped it pare some debt by converting loans into equity.

The company had issued the debentures worth more than Rs 7 billion to three firms acting in concert with the founders and the debentures would be redeemed prior to the rights issue, it said.

"In the event the rights issue has not occurred during the relevant period, the OCD shall continue in accordance with their original terms, and may be redeemed at the end of 18 months from allotment," the airline said.

Earlier this year, the carrier had cut its debt through a debt restructuring process in which the airline issued 116.3 million shares to a consortium of 13 banks led by State Bank of India, after conversion of compulsory convertible preference shares at Rs 64.48 a share.

The airline had restructured its debt by converting almost Rs 12 billion of loans into equity and its current debt stands at about Rs 60 billion at end April.

Kingfisher, which posted a net loss of Rs 2.64 billion on higher fuel costs for the June quarter, has said it also plans to raise $250-$350 million through an issue of gross depositary receipts.

Chairman Mallya had said in June he was waiting for crude prices to stabilise and the fund raising assumed crude oil at $90 a barrel. Crude's current price is around $110 a barrel.

Shares of Kingfisher Airlines, valued at $270.6 million, were down 1 percent at Rs 24.75 in a weak Mumbai market. The stock has fallen 62 per cent so far this year, versus a fall of 21 per cent in the Sensex.

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