Mumbai: The consortium of lenders to debt-ridden Kingfisher Airlines (KFA) will meet in Mumbai 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 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 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 operations of the airline if it is unable to infuse at $600 million immediately.
"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.
Comments
0 comment