Lenders to Kingfisher Airlines have decided against giving further funding to the troubled airline company at a meeting held today in Mumbai, CNBC-TV18 reported.
They have also decided to go ahead with the sale of non-core assets, but a final decision will be taken only after company Chairman Vijay Mallya makes a presentation this month-end, the report said.
“”We have requested more detailed kind of presentations for us to figure out how their (Kingfisher Airlines ) business is moving forward, what is their securities structure and what are the kind of things happening inside the system which is adding value to the security,” a banker told reporters after the meeting.
The lenders are currently valuing the non-core assets of Mallya. But it looks like the meeting remained inconclusive as the banks have sought more details from the management on the revival plan by September, when they will meet again.
As many as 17 banks, led by SBI, have exposure of over Rs 7,000 crore in advances to the crippled carrier, which has not been servicing its debt since January and not paying salaries from March, forcing its pilots and engineers to strike work several times in the past five months.
According to the airline’s auditors, Kingfisher has defaulted in repayment of loans to banks and financial institutions, for which several lenders have had to take a hit by setting aside more funds, with overdues estimated at nearly Rs 800 crore at the end of March 2012.
The meeting assumes significance in the wake of last week’s report by the industry analyst Centre for Asia Pacific Aviation (CAPA), which cast doubts on the continuation of the operations of the airline if it is unable to infuse at $ 600 million immediately.
The lenders last met in July, wherein they appointed HDFC Securities to value the two pledged properties of the promoters, the Kingfisher House in Mumbai and the Kingfisher Villa in Goa – which together have a market value of around Rs 180 crore – with a view to dispose them of as part of their recovery measures.