SBI did not provide lifeline to Kingfisher: FinMin

The government today denied that State Bank of India (SBI) had extended any lifeline to cash-strapped Kingfisher Airlines this fiscal.

"SBI, leader of consortium of lender banks, has informed that no such lifeline has been extended to KFA by them during the current financial year," Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha.

He said this in response to a question whether the SBI and other PSU lenders have extended a Rs 1,200 crore lifeline to the Kingfisher Airlines Ltd (KFA) by converting part of loans into equity.

The crisis-ridden airline has a debt of Rs 7,057.08 crore. The financial crunch has hit its operations with dozens of flights being cancelled. Tax authorities have added to its woes by freezing its bank accounts for non-payment of dues.

The Directorate General of Civil Aviation (DGCA), according to reports, is mulling even cancellation of Kingfisher's flying permit after the airline submitted to it the summer flight schedule with 15 to 16 aircraft as against 28 planes submitted last month.

The beleaguered airline was served a show cause notice by the Civil Aviation regulator DGCA towards the end of February asking why its licence should not be suspended as it had made unannounced cancellations.

Facing severe fund crunch, Vijay Mallya-promoted airline had decided to curtail its overseas flights operations to avoid further losses and also return of a leased aircraft.

Mallya is slated to meet DGCA today.

"We are explaining the situation to DGCA and I hope he will be satisfied. I am meeting him today...I can tell you after that what he has to say," Mallya told reporters outside the Parliament House.