Kingfisher crisis: No room for more loans, says SBI
Posted on: 10:58 AM IST Oct 06, 2012
New Delhi: Adding woes for liqour baron and owner of cash-strapped Kingfisher Airlines Vijay Mallya is main lender SBI which has said that it cannot release any more funds. SBI Chairman Pratip Chaudhuri said that the tax department has freed 80 per cent of Kingfisher Airlines' funds and the loans to the airline are fully provided for. And there is no room for more loans to the airline. This means bad news for the protesting employees who are demanding full payment of their salary backlog.
Mallya is also caught between the DGCA and striking employees. DGCA, the aviation watchdog has issued a showcause notice asking why the airlines flying permit should not be cancelled, asking it to reply withing 15 days. Meanwhile, the employees have stepped up protests against non-payment of salaries since March across the country.
The airline staff took out candle-marches on Thursday and expressed solidarity with their colleague whose wife committed suicide due to financial stress on Friday.
The current monthly salary outgo for Kingfisher Airlines stands at approximately Rs 20 crore. Half of the airline staff were paid their March salaries but for the outstanding salaries, the airline will need Rs 10 crore.
The balance amount for seven months is Rs 120 crore and the management wants to pay only March dues and maybe for April which will take the total for two months to Rs 30 crore. On Thursday, banks finally agreed to release Rs 60 crores to the cash-trapped airline after an emergency meeting on Thursday in Mumbai at the SBI Bhawan.
Kingfisher Airlines, once India's second-largest airline, is half a year behind on salary payments and has grounded its fleet since Monday. Over 80 pilots and 270 Kingfisher engineers have been on intermittent strikes over the past few months, primarily over delay in payment of salaries.
Kingfisher has been saddled with a huge loss of Rs 8,000 crore and a debt burden of over Rs 7,000 crore, a large part of which it has not serviced since January. Several of its aircraft have been either taken away by its lessors or grounded by the Airports Authority of India for non-payment of dues during the past few months.
For the moment, the airline is on a lock-down mode, and will not be operating flights till October 12. Kingfisher's net loss in 2010-11 was Rs 1,027 crore and it doubled to Rs 2,328 crore in 2011-2012. The airline also owes money to 17 banks.