Lenders to the grounded Kingfisher Airlines, however, need more time to look at the proposal.
Vijay Mallya, chairman of the grounded Kingfisher Airlines, has submitted a repayment plan to the Supreme Court.
He is ready to pay Rs 4,000 crore by September 2016 to the banks.
The consortium of lenders to Kingfisher Airlines, led by State Bank of India (SBI), however, will need more time to respond to Mallya's proposal.
Kingfisher Airlines, declared a wilful defaulter by many lenders, owes SBI about Rs 1,400 crore. To other lenders, the outstandings are as follows: Rs 575 crore to Bank of India, Rs 530 crore to Bank of Baroda, Rs 727 crore to IDBI Bank and Rs 710 crore to PNB.
Kingfisher owes over Rs 7,000 crore to lenders.
In a recent development, it was reported that Heineken may ask Mallya to quit the board of United Breweries. The Dutch drinks firm could be looking to raise its stake in the maker of Kingfisher beer to above 50 percent.
Mallya's offer is a welcome move, says former banking secretary DK Mittal. A greater question, he goes on to add, would be whether Mallya had siphoned off the money he was lent or whether there was any diversion of funds at Kingfisher.
Banks stand to lose a lot more as they had converted a part of the airline's debt into equity in 2008. This backlog in dues will have to be added to the total loan, reminds Mittal.
To threaten a failed businessman with arrest bodes ill for investors, he said.
Putting Mallya behind bars isn't a solution to the problem, says Hitesh Jain, analyst at ALMT Legal. He puts the principle amount owed by Mallya at roughly Rs 7,000 crore. He belives the government should look to recover as much as possible. September is too far away and Mallya should outline his plans on how he would go about getting the promised money.
S Narayan, former finance secretary, feels the same: September is eons away. Mallya could be buying time, he says. If Mallya had intentionally defaulted, then he shouldn't be let off the hook. Lastly, he says, Mallya's offer should now send out a message to other defaulting promoters to come forward and make payments.
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