Kingfisher Airlines was given a 15-day time by its lenders to come up with a plan to improve its operations. The debt-trapped airlines was running a truncated service currently.
This decision was conveyed to the officials of Kingfisher Airlines who met the bankers here on Thursday.
Kingfisher Airlines has a total outstanding debt of around Rs.7,500 crore to a consortium of 17 banks led by State Bank of India (SBI).
SBI (Rs.1,400 crore), Punjab National Bank (around Rs.700 crore) and Bank of Baroda (around Rs.500 crore) are the major lenders. Since launching its operations in 2005, the Airlines has not reported any profit. Bank officials asked the airlines to come up with concrete plans to revive it and “security alone is not enough.” Another lender, ICICI Bank, recently sold its exposure of Rs.450 crore in Kingfisher to Srei Venture Capital Ltd., a group company of Srei Infrastructure Finance Ltd. Meanwhile, Kingfisher Airlines refuted charges that the banks had started recovery process by attaching properties of the airlines. “Kingfisher Airlines would like to clarify that it is patently wrong and false to claim or state that banks have started recovery proceedings after a meeting of the consortium of bankers today,” it said in a press communique.
“The meeting was scheduled as an update meeting and there was no discussion on commencement of recovery proceedings,” it added.
“Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today’s [Thursday’s} meeting we raised the issue of this pending approval,” Kingfisher Airlines explained.