SBI rules out further funding for Kingfisher
KFA's licence is under suspension by the Directorate General of Civil Aviation and will be reviewed on December 21. “KFA is comfortable, hopeful and confident that there is no case for final cancellation of the license in their discussion with the DGCA,” Acharya said addressing reporters after the meeting.
The consortium has formed a smaller group consisting of the top five lenders including SBI, Bank of India, Bank of Baroda, Punjab National Bank and IDBI Bank, which will co-ordinate with the KFA management as it seeks to revive the airline. Vijay Mallya chairman, KFA, Sanjay Aggarwal, CEO, and Ravi Nedungadi, CFO, told lenders they were in discussions with a “foreign carrier” for a stake sale, though they did not disclose any further details, bankers said. According to various media reports, KFA is in talks with Abu Dhabi-based Etihad Airways for a stake sale.
Despite this plan, KFA's debt situation remains as it is and bankers are hopeful of receiving repayments on time, Acharya added. Of the R7,000 crore that Kingfisher owes to banks, State Bank of India (SBI) has the largest exposure of R1,400 crore. IDBI Bank, with around R700 crore, Bank of India has R575 crore and Bank of Baroda has R530 crore, are other with sizable exposures. Earlier, SBI had announced a deadline by November 30, when the company would have to come up with a plan to bring in some equity. The meeting had gotten postponed then and lenders have finally met with the management now, said Acharya.
On November 9, Mallya’s United Spirits had signed a $2-billion deal with the Diageo group, in return for a sale of 53.4% in United Spirits , its flagship company. So, bankers had expected some promise of an equity infusion. “Till the time they do not require any further funding from the banking system, we are fine,” Acharya told reporters.
To restart ops in phases, says KFA
Kingfisher Airlines said on Monday it will "restart in a phased manner," with own funding, and will not seek banks' support.
Kingfisher, saddled with a debt load of $1.4 billion, has not flown since October, and is under immense pressure to raise equity fast to keep its licence intact.
"We have also shared a full recapitalisation plan which will be further discussed with a small designated group of bankers," Kingfisher said in a statement, after a meeting with its lenders.
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