Kingfisher Airlines, which has a debt of over Rs 6,000 crore in its books, on Tuesday said it has received preliminary approval from lenders for a debt restructuring plan to cut interest costs. As part of the Reserve Bank of India-sanctioned relief package for the airline industry, SBI Capital Markets, representing a consortium of 15 banks, is expected to announce a debt recast plan for the carrier by December.

Ravi Nedungadi, chief financial officer at the carrier?s parent UB Group said, ?Now each of the bank board has to necessarily pass it, so we?ll wait for them before commenting on the restructuring plan.? It?s not only Kingfisher which will benefit by the debt recast package. Most large banks have an exposure to national carrier Air India, which has around Rs 40,000 crore debt (including Rs 18,000 crore working capital and Rs 20,000 crore for aircraft purchase), and Jet Airways (Rs 14,000 crore).

As Indian air carriers are awaiting a debt restructuring process ahead of their respective fund raising programmes, industry experts say, even a marginal relaxation like resetting the rate of interest and extending the moratorium period will be beneficial to the industry, saddled with a collective debt of over Rs 60,000 crore. Vijay Mallya, UB Group chairman, had recently told shareholders that in the restructuring process, there will be an interest rate reduction to an average of 11%.

?It will be a door-to-door tenure of nine years, with two years as moratorium and a seven-year easy repayment schedule.? He even said the debt restructuring exercise also calls for Rs 900 crore of additional facilities to be provided by banks to the airline. The airline plans to raise funds of about $1 billion, including a $250-million GDRs issue, which would be planned as soon as the debt restructuring exercise is finalised, he added. Kingfisher has reported a net loss of Rs 187 crore for the June quarter of financial year 2010-11 as against Rs 243 crore loss posted in the corresponding quarter a year ago.

Kingfisher scrip rose 2.14% to close at Rs 88.40 on the Bombay Stock Exchange on Tuesday.