Mumbai: Kingfisher promoter Vijay Mallya is ready to infuse funds, estimated to be in the region of Rs 425 crore, into the airline to restart operation in phased manner as and when DGCA gives the go-ahead.
"They have a plan for limited restart. They may start with certain number of flights, of say five aircraft, and go up within three to four months. They need Rs 425 crore for resuming the operations, which they will manage on their own," SBI Deputy Managing Director for mid-corporates Shyamal Acharya told reporters after the 2-hour meeting between 17-member consortium of lenders and the grounded airline here today.
Meanwhile, Kingfisher in a statement said, "We will restart operations in a phased manner and will provide funding ourselves. We have not asked the bank for any support."
"We have also shared full recapitalisation plan (with the lenders) which will be further discussed with a small designated group of bankers," the Vijay Mallya-promoted airline said.
However, an airline source told PTI in New Delhi that it will soon submit a revival plan to the regulator DGCA, which will pave the way for revoking of the suspension of flying licence, which it had lost on October 20.
Apart from Mallya, from the airline's side, the meeting was attended by UB Group chief financial officer Ravi Nedungadi and airline chief executive Sanjay Agarwal, while the 17-member lenders were represented by mid-level managers. However, a PSU bank official who also attended the meeting said that as per the tentative plan, Mallya told lenders he can resume operations with five aircraft, which is mandatory for a scheduled operator licence, and it could be scaled up to 21 planes within six weeks.
"Mallya has not sought any fresh funding from lenders. Though he did not convey how he will manage the funds, he assured us that he has the resources for the same. He also did not name the investors/airlines that he is talks with for stake sale, but asserted that he will be able to rope in someone only after he resumes operations," Acharya told reporters.
SBI has exposure of Rs 1,500 crore to the Bangalore-based airline, which has turned a non-performing account since this January. So is the case with other 16 lenders who together had given Rs 5,500 crore to the airline.
Acharya, however, said the management did not give any timeline for implementing its revival plan, adding, "It is difficult to say when they will restart but our group of bankers will discuss it."
Lenders have constituted a group of five banks from within the consortium to deal with the airline for resumption of operations. The members of the group are SBI, Punjab National Bank, Bank of Baroda, IDBI Bank and Bank of India, Acharya said, adding the first meeting of this group will take place in the next few days.
New grouping is aimed at speeding up the process and vetting the revival plan, he said.
Kingfisher, which has debt of nearly Rs 8,000 crore and accumulated loss and liabilities of a similar amount, has been grounded since October 1 after its pilots and engineers went on a strike over non-payment of salaries for seven months.
On whether the meeting discussed sale of non-core assets, Acharya said the issue did not come up for discussions as meeting focused on short-term starting of the services."
Asked if the bankers are satisfied with the presentation Mallya made, he said, "The presentation was good but it requires some more details which obviously cannot be covered in one meeting.
"The licence is only suspended. They are confident there is no case for cancellation. They are in touch with the DGCA and this is one issue they should take care of," Acharya said. When asked whether banks are open to restructure their loans to the airline for a second time in two years if Mallya
resumes operations, Acharya said, "If the limited restart takes place as discussed and if the small group of bankers are satisfied about the details of the limited plan, then we are not averse to debt restructuring."
On whether the airline management had plans to fund the limited operations through Diageo stake sale proceeds, Acharya said, "All that money that has to come for resumption of operations may not (be) from Diageo deal but may be through the United Breweries."