Kingfisher lenders will soon decide on future course of action with regard to the grounded airline as they do not want the company to close down, State Bank of India (SBI) said today.
“The representatives met in Bangalore ... the plan for action the consortium is deciding. We don’t want to put a lock on the company’s office,” Pratip Chaudhuri, Chairman of SBI, lead lender to Kingfisher, said here.
Last week, the meeting between lenders and the Kingfisher management remained inconclusive as bankers were “not impressed” with the revival plan, the sources said.
The next meeting will be held in Mumbai soon where lenders are likely to push for better commitment from Kingfisher Airlines (KFA), the sources added.
The 17-bank consortium has extended Rs 7,000 crore loans to Kingfisher. SBI alone has an exposure of Rs 1,500 crore, which has not been serviced since January, 2012.
As per the revival plan submitted to Directorate General of Civil Aviation (DGCA) last month, Kingfisher had said it would require about Rs 652 crore over the next 12 months for running its operations. These funds would come from the UB Group’s resources as banks were unwilling to fund the cash-strapped airline.
Of the Rs 652 crore that the airline would need to restart operations, Rs 120 crore would be needed to meet salary arrears for its employees.
Kingfisher Airlines CEO is understood to have informed the DGCA that the salary dues would be cleared by giving two months’ wages and back wages each month from the next month onwards.
In addition, funds would be required to refurbish the aircraft, including their engines. The airline’s pilots would also have to undergo refresher training and medical tests before they can start operating flights again.
Kingfisher officials claimed that there were no dues against oil companies, barring interest payments due to HPCL.
The airline would have to meet the dues it owe to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs 250 crore.