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The 13-bank consortium that together have an exposure of about Rs 7,000 crore to Kingfisher Airlines, has advised the private carrier to bring in equity to the tune of Rs 400 crore and provide financial and operational details before its scheduled meeting with bankers on Tuesday.
Call for details
Mr Pratip Chaudhuri, Chairman, State Bank of India, on Sunday said that the company should provide information pertaining to the condition of its fleet, how many of the planes were airworthy, availability of equity, the security of supply of fuel and assurance regarding landing at different airports before the scheduled meeting on Tuesday.
It is only after the company provides all the necessary details, will the bankers look at possible options, including that of restructuring, if required, Mr Chaudhuri told newspersons on the sidelines of a banking conference organised by the Associated Chambers of Commerce and Industry of India here on Sunday.
“Before taking a further call on this matter, we first want to see that money (equity of Rs 400 crore) coming in. Other creditors like oil companies and airport authorities are working out a schedule, and then we will sit with the company to understand how much more money it requires and what are the different sources. All the money need not necessarily come from banks,” Mr Chaudhuri said.
The Vijay Mallya-owned Kingfisher Airlines had earlier committed to bring in equity of Rs 800 crore, of which, it has already pumped in Rs 400 crore, Mr Chaudhuri said. “We expect them to bring in another Rs 400 crore now.”
However, Mr Chaudhuri also pointed out that the promoters of the beleaguered airline did not have much equity. “In the case of Air India and Jet, the promoters had put in equity but Kingfisher on its part has asked for some policy liberalisation in foreign direct investment from the Government so as to enable the company to scout for equity infusion from some foreign airlines. In the interim period, the company might bring in equity from its other businesses like liquor.”
When asked about the possibility of further restructuring and its impact on banks' asset quality, Mr Chaudhuri said, “Restructuring is a hypothetical question and even if that happened then it has to be with endorsement from the Reserve Bank of India like on the earlier occasion.”
State Bank has a total exposure (fund and non-fund) of about Rs 1,500 crore, Mr Chaudhuri said.
Replying to a query regarding the possibility of conversion of a portion of debt into equity, Mr Chaudhuri said, “We are not equity investors. We did it earlier as an emergency measure. Banks can come in as lenders not as promoters.”
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