Management may present a roadmap for equity fund infusion
Lenders to cash-strapped Kingfisher Airlines Ltd are likely to meet in Mumbai on July 5 to review the airline’s financial position.
This has led to a buzz in the market that some form of loan restructuring could be put on the table for consideration of the bank consortium, led by State Bank of India.
Indications are that the airline management may present a roadmap for equity fund infusion. It may also possibly make a case for loan restructuring by the existing bank consortium, sources close to the developments said.
This meeting assumes significance as the beleaguered airline had recently taken steps to reduce costs and also get its accounts upgraded with a lender who had done pre-delivery payment (PDP) aircraft finance.
However, there is no immediate plan on the part of the bank consortium to pump in more working capital funds into the airline, sources indicated to Business Line.
There have been talks of Government fast-tracking the proposal to allow foreign direct investment in domestic airlines.
This could gain momentum with the Prime Minister, Dr Manmohan Singh, taking charge of the finance portfolio. The airline’s Chairman, Mr Vijay Mallya, reportedly met with the PM shortly after he assumed charge of the portfolio.
Through an escrow fund mechanism, banks are already having tight control over the airline’s cash flows. For the quarter ended March 2012, many of the state-owned banks had categorised the airline as non-performing asset and made provisions for their exposure.
With the private airline reportedly defaulting on lease rentals of over Rs 1,000 crore, lessors had recently taken back 34 aircraft. However, the company maintained that it had returned the aircraft and that the aircraft had not been taken away by the lessors.
From 64 aircraft in November last year, the Vijay Mallya-owned airline is now left with only 13 aircraft.
Keywords: Prime Minister Manmohan Singh, Vijay Mallya
Comments:
Will anyone really tell us where has all the money vanished. they have not paid most of the dues and also the amount of IT collected from their employees is unpaid to Govt. Is it an example of stealth is wealth? If at all this airliner is funded, then the Govt also favours only the dishonest and then where comes the question of bringing out BLACKMONEY, if this is left unanswered?
Malya has already fooled the Indian Bankers to Bankroll his Airline, with little or money of his own. The wise Bankers seem to have deliberately closed their eyes to this fact, for reasons best known to them. They need to remember that they are handling hard earned savings of common people. Any reinforcement of a failed project is bound to draw conclusions of criminal collusion. It is time for wise Bankers to call his Bluff and take possession of the
Airline.
tax payers and the shareholders interest is sacrificed to favour a private company. a CBI enquiry into this dealing by SBI is called for. the equity conversion of unpaid loan smells fishy
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