Kingfisher needs fresh equity infusion: SBI
7 July 2012 2:57 AM GMT
The State Bank of India [SBI] on Friday said plans to revive Kingfisher Airlines will not work unless they are backed by fresh equity infusion.
‘Firm plan should be to bring equity... whatever plans they make [to revive the airline], plans have no meaning till equity comes,’ SBI chairman Pratip Chaudhuri said.
Pointing out that the airline again suffered losses in the March quarter to the tune of Rs 1,000 crore, he said, ‘the more it gets burdened with losses, the more difficult will be the recovery.’
The SBI chief further said the promoters should not reduce the number of flights as it would erode the confidence of passengers and travel agents.
‘They should keep the airlines running and show some courage’, he said, adding the bank has confidence in the management of the airlines which is led by Vijay Mallya.
Beleaguered Kingfisher on Thursday said it plans to sell two of its unused properties in Mumbai and Goa to partly repay staggering loans totalling about Rs 7,500 crore.
The lenders have been demanding at least Rs 1,000 crore in fresh capital by promoters as a pre-condition for considering the airline’s request for working capital loans of around Rs 2,000 crore. This was a pre-condition that lenders insisted at the previous meeting in March. Out of the total loans, SBI alone has an exposure of over Rs 1,400 crore, followed by PNB [Rs 700 crore] and Bank of Baroda [around Rs 500 crore].
‘Firm plan should be to bring equity... whatever plans they make [to revive the airline], plans have no meaning till equity comes,’ SBI chairman Pratip Chaudhuri said.
Pointing out that the airline again suffered losses in the March quarter to the tune of Rs 1,000 crore, he said, ‘the more it gets burdened with losses, the more difficult will be the recovery.’
The SBI chief further said the promoters should not reduce the number of flights as it would erode the confidence of passengers and travel agents.
‘They should keep the airlines running and show some courage’, he said, adding the bank has confidence in the management of the airlines which is led by Vijay Mallya.
Beleaguered Kingfisher on Thursday said it plans to sell two of its unused properties in Mumbai and Goa to partly repay staggering loans totalling about Rs 7,500 crore.
The lenders have been demanding at least Rs 1,000 crore in fresh capital by promoters as a pre-condition for considering the airline’s request for working capital loans of around Rs 2,000 crore. This was a pre-condition that lenders insisted at the previous meeting in March. Out of the total loans, SBI alone has an exposure of over Rs 1,400 crore, followed by PNB [Rs 700 crore] and Bank of Baroda [around Rs 500 crore].
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