KFA lenders want Mallya to make fresh revival plan by Sept
The meeting of Kingfisher Airlines' lenders here today remained inconclusive as banks have sought more details from the management on the revival plan by September, when they will meet again.
September 05, 2012 / 16:28 IST
The meeting of Kingfisher Airlines' lenders here today remained inconclusive as banks have sought more details from the management on the revival plan by September, when they will meet again.
"We have requested more detailed kind of presentations for us to figure out how their (Kingfisher Airlines ) business is moving forward, what is their securities structure and what are the kind of things happening inside the system which is adding value to the security," a banker told reporters after the meeting."Once we understand clearly, which we couldn't today, we could probably take a call," he said, adding, "we have also requested chairman Vijay Mallya himself to come and make a presentation at the next meeting likely in September."The financially crippled airline has 17 lenders led by the State Bank, which has an exposure of Rs 1,500 crore to the airline, which has not been servicing its nearly Rs 7,000 crore long-term bank loans since January. It has also not been paying salaries to its employees, or statutory taxes.The banker further said, "We want to know what are the things they want to do to repay our loans, in the short term, medium and long term. There should be clarity."Apart from this huge debt, the airline also has an accumulated loss of over Rs 8,000 crore. Since its launch in May 2005, the airline has not made money.The meeting was significant in wake of a recent report by industry analyst Centre for Asia Pacific Aviation (CAPA) which cast doubts on continuation of airline's operations if it is unable to infuse USD 600 million immediately.The last meeting of the lenders took place in July, wherein they appointed HDFC Securities to value two pledged properties-the Kingfisher House in Mumbai and the Kingfisher Villa in Goa, which together have a value of around Rs 180 crore, with a view to dispose of as part of recovery measures."Kingfisher faces the prospect of an operational shutdown, possibly temporarily, to allow it to restructure and re-organise. A viable turnaround is unrealistic without a significant recapitalisation of the airline," CAPA said in its report on the industry's performance in the first quarter of the current fiscal, last week.According to the agency, restructuring of the airline will require the banks to take a significant hit as they have a huge exposure to the carrier. 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!
