Kingfisher Airlines Ltd (KFA) had a meeting with the consortium of lenders lead by the State Bank of India (SBI) recently, as per a Business Standard report. Bankers and the senior management are expected to convene another meeting later this month where promoter Vijay Mallya is expected to participate to submit a revival plan.
KFA is yet to submit any proposal on its revival plan. Banks are nudging KFA management to submit a revival plan for the past few months. KFA has a debt of about Rs 7,700 crore, which has been a Non-Performing Asset (NPA) for most of the banks around last one year. Among lenders, SBI has an exposure of around Rs 1,400 crore to Kingfisher Airlines and IDBI Bank Rs 727 crore. Bank of India has extended a loan of Rs 575 crore, while Bank of Baroda has an exposure of Rs 537 crore. Private sector lender ICICI Bank sold off its Rs 450 crore debt to the airline to Srei Infrastructure Finance in July earlier this year.
The meeting came a week after the Vijay Mallya-owned United Spirits Ltd had signed a USD two billion deal with Diageo group and sold controlling stake of 53.4 per cent in United Spirits (USL) on November 9, 2012 the bankers had expected some promise of an equity infusion.
Earlier SBI had asked capital infusion USD one billion till November 30, 2012. The company has currently shut down its operation following the strike by its engineers. The Directorate General of Civil Aviation (DGCA) suspended its flying permit while the strike was on. The airline can’t resume operations as its flying license stands suspended in the absence of a revival plan by the company which has been made a prerequisite by DGCA to allow airline to fly.