MUMBAI: Lenders of Kingfisher AirlinesBSE 2.94 %will meet the promoter Vijay Mallya on December 17 to decide the way forward on the ailing
company.
The meeting is crucial for Kingfisher Airlines whoseflying licence has been suspended since October 20 due to safety reasons and has been seeking financial support from lenders for over a year to revive the company. Lenders, on the other hand, have declined to provide any additional funds unless promoters infuse equity capital.
The meeting also gains prominences since "the lenders have decided to take a final call on the fate of airlines" said a senior bank officials who did not want to go on record.
He said that the bank has received intimation from the lead bank, the State Bank of IndiaBSE 0.77 %indicating that the lenders will have to proceed with recovery process if the company is unable to come up with a concrete plan to revive the airlines.
Incidentally, even as banks have lent over Rs 7000 crore to the airlines they do not possess as much securities that can be enforced to recover their dues.
The promoter, Mr Mallya has pledged Kingfisher House located in Mumbai and a Goa villa with banks. The combine value of both the properties will not fetch lenders more than Rs 300 crore.
However bankers are hoping that Mallya would now be better positioned to infuse capital following the deal withDiageo Plc wherein he sold 27 per cent of his stake in United SpiritsBSE 0.92 % early November. However, speaking to analysts, Mallya had hinted that both (airlines and liquor) the businesses are dealt separately.
"There will be no cost contamination. Kingfisher will chalk out its recapitalisation plan separately and independently of this transaction," Mallya had said.
This will be the first meeting between the lenders and promoters after the company's flying licence was suspended and after the Diageo deal was announced. Lenders had originally planned to meet on December 8.
However the meeting was reschedule so that Vijay Mallya could attend it. Earlier, Pratip Chaudhuri, SBIBSE 0.77 % chairman had indicated that lenders had set a deadline of November 30 for the company to bring in fresh capital.
The meeting is crucial for Kingfisher Airlines whoseflying licence has been suspended since October 20 due to safety reasons and has been seeking financial support from lenders for over a year to revive the company. Lenders, on the other hand, have declined to provide any additional funds unless promoters infuse equity capital.
The meeting also gains prominences since "the lenders have decided to take a final call on the fate of airlines" said a senior bank officials who did not want to go on record.
He said that the bank has received intimation from the lead bank, the State Bank of IndiaBSE 0.77 %indicating that the lenders will have to proceed with recovery process if the company is unable to come up with a concrete plan to revive the airlines.
Incidentally, even as banks have lent over Rs 7000 crore to the airlines they do not possess as much securities that can be enforced to recover their dues.
The promoter, Mr Mallya has pledged Kingfisher House located in Mumbai and a Goa villa with banks. The combine value of both the properties will not fetch lenders more than Rs 300 crore.
However bankers are hoping that Mallya would now be better positioned to infuse capital following the deal withDiageo Plc wherein he sold 27 per cent of his stake in United SpiritsBSE 0.92 % early November. However, speaking to analysts, Mallya had hinted that both (airlines and liquor) the businesses are dealt separately.
"There will be no cost contamination. Kingfisher will chalk out its recapitalisation plan separately and independently of this transaction," Mallya had said.
This will be the first meeting between the lenders and promoters after the company's flying licence was suspended and after the Diageo deal was announced. Lenders had originally planned to meet on December 8.
However the meeting was reschedule so that Vijay Mallya could attend it. Earlier, Pratip Chaudhuri, SBIBSE 0.77 % chairman had indicated that lenders had set a deadline of November 30 for the company to bring in fresh capital.
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