Banks say no to bailout package for Kingfisher

Anjana Chandramouly Bangalore | Updated on March 12, 2018

The 13-bank consortium has decided not to provide a bailout package.

Ask promoters to put in more equity, disclose financial details

The 13-bank consortium that has lent to private carrier Kingfisher Airlines has decided not to provide a bailout package for the debt-ridden company as of now, according to a top official of a lender-bank, who did not want to be identified.

Over Rs 6000-cr debt

The official said that the airline promoters have been asked to put in more equity into the venture as well as disclose more financial details to the banks.

The decision was taken after a meeting with the airline here on Saturday. The meeting was held after the Union Minister of Civil Aviation, Mr Vayalar Ravi, said on Friday that he would speak to the Finance Minister to request banks to offer a bailout package to the beleaguered airline that has a total debt of over Rs 6,000 crore.

The banks have now asked the company for its cash budget, and are expected to take a call on extending more funds next week, said the official. Banks have a total exposure of about Rs 7,000 crore to Kingfisher Airlines. Of this, over Rs 1,300 crore had been converted into equity during the last fiscal as part of a debt restructuring exercise. Over Rs 4,000 crore of the banks' total exposure are in the form of term loans.

The consortium, led by banking behemoth State Bank of India, also includes ICICI Bank, IDBI Bank, Punjab National Bank, Bank of Baroda, Bank of India, UCO Bank, Oriental Bank of Commerce and State Bank of Mysore. In all, these banks now hold a 23.4 per cent stake in the company.

“We are also expecting the promoter of the company to put in more equity at this juncture,” said another banker. The airline announced recently that it has got the approval of its shareholders for a Rs 2,000-crore rights issue.

According to the banker, the airline has also been asked to provide more financial statements in the coming days that would be analysed by a core bankers' committee on Thursday.

Core panel

The committee would have representation from SBI, ICICI Bank, IDBI Bank, PNB and BoB, he said.

Both the officials pointed out that the company has been asked to work out its funding requirements that would also be taken up for discussion at the meeting on Thursday.

“In the meantime, representatives of the banks would meet their respective top managements and we would take a call on whether or not to fund further,” they said.

Published on November 12, 2011

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