A full recovery of the $1.4 billion owed by embattled carrier Kingfisher Airlines was unlikely in the short term and banks have told the airline to infuse equity, State Bank of India chairman Pratip Chaudhuri told a news agency on Tuesday. ?It is looking difficult unless they get fresh equity,? he said on the sidelines of an event in Sydney, adding, ?We have told Mallya that either he has to get equity or pump in money from his liquor business.?
Kingfisher closed 0.72% lower on the BSE on Tuesday at R10.97. At a lenders? meeting last Thursday, bankers had given the airline a fortnight to come up with a plan on how it proposed to improve operations and repay debt. Bankers also discussed the sale of assets, including property. ?This is what they have offered us,? a senior banker had said after the meeting.
Kingfisher, which has never made a profit since it started operations, reported a loss of R2,328 crore in 2011-12. In the March quarter alone, the loss was as high as R1,152 crore.
Last week, ICICI Bank sold its R430-crore exposure to the carrier to a fund run by Srei Infrastructure. Meanwhile, LKP Finance, a non-banking financial company, has sold its entire stake in Kingfisher within a month of converting its debentures into 16.48% equity in it. The sale of shares was done in two tranches of 1.74 crore and 11.58 crore units between July 4 and July 6.
The sale price was nearly half of the conversion price of R23. LKP Finance had purchased debentures worth Rs. 160 crore in January 2011.
The airline currently operates 120 flights a day with 16 planes compared with 360 flights last year with 64 aircraft. The carrier was compelled to stop flying international destinations in April because its cash flows were severely choked. Since last November, Kingfisher has returned 20 aircraft to lessors since it has been able to generate funds to pay lease rentals.