Kingfisher Air needs to infuse $1 bn, says SBI chief

State Bank of India, (SBI), the largest lender to Kingfisher Airlines is disappointed at the latter’s fund raising plans. Pratip Chaudhuri, chairman, SBI said that he does not see any urgency from KFA on that front.
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Nov 07, 2012, 07.38 PM | Source: Moneycontrol.com

Kingfisher Air needs to infuse $1 bn, says SBI chief

State Bank of India, (SBI), the largest lender to Kingfisher Airlines is disappointed at the latter’s fund raising plans. Pratip Chaudhuri, chairman, SBI said that he does not see any urgency from KFA on that front.

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Kingfisher Air needs to infuse $1 bn, says SBI chief

State Bank of India, (SBI), the largest lender to Kingfisher Airlines is disappointed at the latter’s fund raising plans. Pratip Chaudhuri, chairman, SBI said that he does not see any urgency from KFA on that front.

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State Bank of India, (SBI), the largest lender to Kingfisher Airlines is disappointed at the latter's fund raising plans. Pratip Chaudhuri, chairman, SBI said that he does not see any urgency from KFA on that front. SBI has an exposure of Rs 1580 crore to KFA and the interest for which has not been serviced since January.

Chaudhuri further said that he would like to support KFA as a going concern. "The airline needs to infuse at least USD 1 billion," he added.

The bank has also given the company time till November 30 to infuse equity, state media reports.

Chaudhuri further said, "We are not interested where the capital is coming from. Whether it is coming from Mallya, group companies, outside, Indian, overseas, airlines, whatever be the source, we are agnostic about the source. But we would like to see capital being infused. How much capital infusion? We do not put a gun on their head. But the more that comes in, the better it is because airline is a very capital intensive business. I think about USD 1 billion would be a good starting point."

In the past one year, some banks including SBI have classified Kingfisher as non-performing asset (NPA). In fact, SBI had also part sold its stake in the airline. Banks have in unison say that the airline needs to get an investor soon and they are not pulling the plugs right now on humanitarian grounds.

The airline has pledged all its securities to banks which the latter will start monetising after the airline fails to raise funds.

Simultaneously, SBI which has around Rs 35 billion of debt exposure to Suzlon is confident of the wind turbine maker's paying back capability.

Suzlon was poised to default on redemption of more than USD 200 million in overseas convertible bonds, due last month, after bondholders rejected a four-month extension.

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Kingfisher Air needs to infuse $1 bn, says SBI chief

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