Kingfisher
Airlines' debt levels are at a peak, and there is no room for further debt, the
State Bank of India Chairman, Mr Pratip Chaudhuri, said here on Monday.
“Kingfisher, as
a company, needs to get in more equity, and the sooner they get it (it's
better). I would say they should get it as of yesterday,” he said, while
talking to reporters on the sidelines of the bank's CSR programme.
According to
him, the loans to the company are not “so much fund-based”. The loans have been
given as guarantees to oil companies so that they can keep supplying fuel to
Kingfisher, he pointed out.
“If we
discontinue the guarantees, the whole fuel supply chain will stop. If we
precipitate action, it would endanger jobs, endanger connectivity in the
country. We are working with the company,” said Mr Chaudhuri.
The company
should bring in capital, whether from domestic investors, foreign investors or
foreign airlines, “we are neutral on the source of the equity”, he added.
However, the company in its response has told banks that it would be easier for
them if the FDI rules were changed.
“We have no
comments on that, and it is for the Government to decide on that,” he said.
Mr Chaudhuri
added that the whole aviation sector was under stress and only those airlines
with “good amount of equity can hope to navigate through this”.
The banks are
working “very patiently with the companies, persuading them to increase the
time of repayment of their loans. The companies also have to show some
resolve,” he said.
In the case of
Air India, Mr Chaudhuri said that the Government has shown a lot of resolve,
and has pumped in equity.
“They have
protected the banks against any large-scale write-off. In case of Air India,
the owners or shareholders are showing a lot of proactive action,” he added.
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