Logistics

Kingfisher can hope to get money only from banks where its account is not NPA

Anjana Chandramouly Bangalore | Updated on March 12, 2018

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The decision to extend further loans to Kingfisher Airlines now rests with those banks in the lending consortium for whom the account has not turned sub-standard.

It is learnt from bank officials that the lead bank of the 13-bank consortium, State Bank of India, had requested members of the Master Debt Restructure Arrangement (MDRA) on Friday to see whether a short-term fund of Rs 200 crore be given to the airline.

In December 2011, SBI Caps, which was hired by Kingfisher Airlines to assess its recapitalisation needs, pegged the company's working capital requirements at Rs 680 crore.

Kingfisher Airlines' account has turned sub-standard with three banks belonging to the consortium during the third quarter of this fiscal, and so the decision to extend further funding to the airline now lies with the rest of the banks, a banker close to the developments told Business Line.

“The additional funding can be sought only from banks where the account is standard,” he said.

But the lender consortium is yet to take a final call on cash-strapped airline's request for additional funding. Meanwhile, the airline in a press statement issued on Monday said that it has had a “constructive” meeting with its bank consortium last week.

“Banks have not as yet given their consent, and are yet to take a final call on the proposal,” said the official.

Clearing dues

In another meeting held last week, it is learnt that Kingfisher Airline had assured to clear the entire overdues to two of the three banks, where its account had turned a non-performing asset, by February. The official also said that there was no news yet on whether the company has paid the critical amount to these two banks.

He added that the airline had assured to clear the overdues of the third bank by March.

Published on February 20, 2012

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