Top bank executives
unlikely to attend, with decisive outcome not expected hope for more clarity
on action plan
|
Lenders
to Kingfisher Airlines (KFA) will meet its promoter, Vijay Mallya, and the rest
of the brass tomorrow, to chart a way forward for the grounded airline. While
the bankers hope the management comes with a clear plan of action for the
debt-laden carrier, chances of the meeting being decisive are slim.
Fund infusion plans will top the agenda.
The company management is expected to make a presentation on the issues between
it and the aviation regulator, and on its detailed business plans.
An executive
with a public sector bank(PSB) based here said only middle-level executives
from banks would attend. Top bank officials would meet separately at a later
date, based on what happens tomorrow.
There have been a series of meetings
between banks and the company management but without much headway. The lenders
have said they might start the recovery process if Mallya fails to give a clear
plan of action. However, the banks don’t have enough collateral to initiate the
process; the collateral KFA has given is just a fraction of the total debt of
about Rs 7,500 crore.
The head of another bank said there was
very little hope of revival with the current management of Kingfisher. Only the
induction of a strong airline as a new partner, which would pump in money and
take control over a period, might give hope for some recovery. Kingfisher has
said it was in talks for selling stake toEtihad, the national
airline of the United Arab Emirates.
Pratip Chaudhuri, chairman
of State Bank of India (SBI), had said the airline needed infusion of at least
$1 billion (Rs 5,500 crore) to make it fly again. Kingfisher has been grounded
since October, following a strike of its engineers. Later, on October 20, the
Directorate General of Civil Aviation suspended its flying permit.
It was almost a year earlier when most
lenders declared their loans to the airline as non-performing assets (NPAs).
Till then, the loans were treated as sub-standard loans, for which banks were
required to make 15-20 per cent provision. With no sign of revival and
repayment, the account could slip into the doubtful category, adding to the
provisioning from January 2013. Many banks have already made extra provisions.
Indian Overseas Bank is the only bank still
treating its exposure to Kingfisher as standard asset. With payments due for
more than 90 days, the bank will declare it an NPA in the third quarter.
The credit head at a large south-based PSB
said with the lack of assets in the company, the banking regulator might even
ask for 100 per cent provisioning.
http://www.business-standard.com/india/news/lenders-meet-mallya-kfa-brass-today/495823/
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