Kingfisher fails to provide clear revival plan: Lenders
Kingfisher Airlines has submitted a revival plan to the Directorate General of Civil Aviation (DGCA) today, although the plan has no clarity on funding source and timeframe for re-starting operations, say sources.
April 11, 2013 / 15:48 IST
Kingfisher Airlines has submitted a revival plan to the Directorate General of Civil Aviation (DGCA) today, although the plan has no clarity on funding source and timeframe for re-starting operations, say sources.
After submitting the plan, Sanjay Aggarwal, the airline's CEO said that initial funding of Rs 650 crore will be infused by parent UB Group. He however did not divulge more details on when the airline will be able to resume flights.Exclusive banking sources told CNBC-TV18 that the plan in unclear and inconclusive like previous plans submitted by the airline. The airline has stopped flying since October last year following a strike a section of employees over delay in salary payment. The airline has since then talking about roping in investors to raise funds but there is no development on this front.The airline's flying license expired in December 2012, and the DGCA has refused to renew it due to the airline’s inability to raise fundsIt is extremely crucial for chairman Vijay Mallya to provide a concrete revival plan which will help him start operations. . But the latest plan submitted by Aggarwal has upset bankers since it lacks concrete initiatives.Saddled with over Rs 7,000 crore debt, the airline has faced flak for its inability to repay lenders. KFA had in January this year said that it will resume operations by March with seven aircraft and will later extend it to over 20. However, it has not been able to convince the regulator and also its lenders about how it will raise funds.According to a report in the Financial Express, State Bank of India has sent a legal notice to KFA seeking recovery of loans. KFA can either suggest an out-of-court settlement or take legal recourse, in which case bankers will move the debt recovery tribunal (DRT), the report said further quoting a banker. Read This: Kingfisher Airlines staff to protest at Chinnaswamy stadium Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
