Banks seek more details on Kingfisher’s operationsNovember 13th, 2011 - 10:23 pm ICT by IANS
Kolkata, Nov 13 (IANS) Prior to the meeting with the Kingfisher Airlines board, the bankers have asked for more details regarding the operations of the airlines apart from an equity injection of Rs.400 crore before restructuring of loans is considered.
Kingfisher, India’s second largest airline, is currently facing the biggest ever crisis mainly the high interest cost on its Rs.7,057.08 crore debt.
The civil aviation ministry has sought the finance ministry’s help in reviving the airlines through restructuring its debt by the state-run banks.
But the bankers, including the biggest lender State Bank of India (SBI), have asked the Vijay Mallya-owned airlines for more detailed information about it before a meeting Tuesday.
“Possibly Kingfisher has approached the government for foreign investment. We have already told them what they have to do before the bankers take a view on further lending to them. We have called them for a meeting on Tuesday,” SBI chairman Pratip Chaudhuri told reporters on the sidelines of a programme organised by industry chamber Assocham here.
Chaudhuri said the airlines has to come up with a lot of information like what was the condition of their fleet, how many of them were airworthy and what was the assurance of their fleet’s landing at different airports.
Stating that as of now there was no plan for increasing the equity of the banks in Kingfisher Airlines, he said: “We are not investors actually, we came in as part of restructuring.”
He, however, said debt restructuring, if at all it happened, will take place with the endorsement of the Reserve Bank of India (RBI).
“The promoters (of the airlines) have committed to bring about Rs.800 crore and so far they have brought only Rs.400 crore,” he said.
“The company needs equity and promoters do not have so much of equity. In case of other airlines, the promoters have increased their equity. Unless another airline joins in, we do not see much of value being added to Kingfisher Airlines. The company is also committed to bring in equity from other businesses. Their liquor and other businesses are doing well,” Chaudhuri said.
Stating that the airlines was a valued company for the bank, which was “deeply committed” to it, Chaudhuri said: “Apart from finance, there are other factors too. Unless all of it falls in a place, only finance will not solve the issue….”
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