Kingfisher Airlines lenders to meet on Wednesday
Mumbai: The consortium of lenders to the near-bankrupt Kingfisher Airlines (KFA) will meet here on Wednesday to discuss the way forward with their exposure to the Vijay Mallya-promoted carrier.
"We (the lenders and Kingfisher Airlines) will meet here on Wednesday," SBI Chairman Pratip Chaudhuri told reporters here on the sidelines of a banking event.
As many as 17 banks, led by SBI, have exposure of over Rs 7,000 crore in advances to the crippled carrier, which has not been servicing its debt since January and not paying salaries from March, forcing its pilots and engineers to strike work several times in the past five months.
Apart from this huge debt, the private airline also has an accumulated loss of over Rs 8,000 crore. Since its launch in May 2005, the carrier has not made profit.
The meeting assumes significance in the wake of last week's report by the industry analyst Centre for Asia Pacific Aviation (CAPA), which cast doubts on the continuation of the operations of the airline if it is unable to infuse at USD 600 million immediately.
The lenders last met in July, wherein they appointed HDFC Securities to value the two pledged properties of the promoters, the Kingfisher House in Mumbai and the Kingfisher Villa in Goa - which together have a market value of around Rs 180 crore - with a view to dispose them of as part of their 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.
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 ailing carrier.