Trying to help revive Kingfisher: SBI
Posted on: 05:23 PM IST Dec 05, 2012
Mumbai: State Bank of India, the lead banker in the 17-lenders consortium that extended Rs 7,000 crore loans to the now grounded Kingfisher Airlines, on Wednesday said the banks are "trying to do everything to find an amicable solution" to the carrier's financial troubles. The SBI comment comes a week after the expiry of deadline that the lenders had set to the airline management to come up with a revival plan, that includes a USD 1 billion
Kingfisher is a good company with a high brand value and lenders are trying to do everything to see that an amicable solution is found, SBI Managing Director and Chief Financial Officer Diwakar Gupta told reporters on the sidelines of a PwC event here. After the regulator DGCA suspended the airline's flying licence on October 19, SBI Chairman Pratip Chaudhuri had set a November 30 deadline to the airline management to infuse at least USD 1 billion in fresh capital as part of the revival exercise for the banks to consider lending afresh or recasting the existing loans.
SBI has an exposure of Rs 1,500 crore to the Bangalore-based airline, which has not been serviced since January this year. Launched in May 2005, the airline has not reported a single penny in profit and has bank debt over Rs 7,000 crore and unpaid interest thereon since January, apart from over Rs 1,000 crore in vendor and tax arrears.
It also has accumulated losses of nearly Rs 10,000 crore, apart from the salary dues of the past seven months. Labour unrest towards the end of September led to the airline suspending operations from October 1 and on 19th of the same month, the regulator DGCA had suspended its flying licence.