Kingfisher-lenders meet today on debt repayment and revival plan

Lenders of troubled carrier Kingfisher will meet the airlines’ management on Friday to know about its debt repayment and revival plan.

“Friday will be a challenging day for Vijay Mallya and the bankers to come to a platform and see whether they can sail through the crisis together,” said M V Tanksale, Chairman and Managing Director, Central Bank of India.

Central Bank of India is one of the 18 lenders to the airline. However, it is not part of the core group which bankers had formed in December to monitor the company’s revival plan. The lenders’ consortium is led by the State Bank of India while some of the other lenders are Punjab National Bank, Bank of India, Bank of Baroda and IDBI Bank.

Yesterday, Kingfisher got No-Objection Certificates (NOCs) from oil companies and leasers to start operations. However, it is yet to get NOCs from the banks, airport operators, Airport Authority of India (AAI) and Director General of Civil Aviation (DGCA) among others.

“News reports have indicated that by February, seven aircraft would be flying. If some hopes are there for that, we will be there to support the hopes,” Tanksale said indicating that lenders would be supporting the carrier if they see a viable plan to revive the airline.

Bankers were optimistic about United Spirits deal with Diageo to sell the majority stake to the global liquor major. They had expected some parts of proceeds would come in the airline. However, the deal is yet to be sealed.

“About two months ago all of us (banks) were bullish on the deal what the company had done that so much cash will be in. But nobody is very sure when that cash will be in and when things will be place” added Tanksale.

The bankers have warned that if the airline’s management fails to come up with a concrete revival plan, including loan repayment, they may decide to go for legal action for recovery.

The Rs 7,000-crore KFA account has become non-performing assets to most banks as the carrier has failed to pay interest for more than an year now.