Mallya will rope in investors into KFA, says Ajit Singh

Civil Aviation minister Ajit Singh says that promoter Vijay Mallya is confident of roping in investors into Kingfisher. He has also asked the directorate general of civil aviation (DGCA) to prepare its report on the ailing carrier.

The government today said that SBI has no plans to provide fresh loans to debt-ridden Kingfisher Airlines, even as  Mallya sought banks help to get its accounts de-frozen.

"SBI has informed that currently there is no such plan to provide additional loan to Kingfisher Airlines," Finance Minister Pranab Mukherjee said in Rajya Sabha to a query if State Bank of India (SBI) had initiated a proposal to bailout the airline by sanctioning fresh loan of Rs 1,500 crore.

In the Parliament House Complex, Mallya told reporters that while the airline is "facing a serious handicap" as its accounts are frozen, it does not require bailout from the government.

"We are not asking for bailout from the government but hope for help from banking sector to de-freeze our accounts," he said.

The airline has a debt of Rs 7,057.08 crore and the financial crunch has hit its operations with dozens of flights being either cancelled or clubbed. Tax authorities have added to its woes by freezing its bank accounts for non-payment of taxes.

Asked on exposure of SBI and other banks to the air carrier at the end of the current fiscal, Mukherjee said, "Since the accounts as on March 31, 2012, are to be finalised, it is not possible to ascertain the outstanding of KFA".

However, all interest and dues up to August, 2011, have been paid.

Mukherjee also said SBI, leader of consortium of lenders to the airline, has informed that the account of Kingfisher is sub-standard' with eight public sector banks (PSBs) and 'standard' with five PSBs as on February 2012.

"Consortium agreed to 'holding on operations' whereby a portion of the credits into the account are appropriated for reducing irregularities in the accounts of banks," he said.

Mukherjee further said the consortium have been meeting regularly to deliberate and decide upon the course of steps to be taken.