As cash-strapped Kingfisher Airlines battles to stay afloat, a consortium of lenders is believed to be considering fund support to the beleaguered carrier. A 13-bank consortium, led by State Bank of India, is considering short-term funding to the airline but the quantum of support is yet to be decided, sources said.
Each member bank has to get approval from its board and the process would take some time, the sources said. There was no official word either from the bankers or Kingfisher on reports that State Bank of India has agreed to give about Rs. 1,500 crore.
When contacted, SBI Chairman Pratip Chaudhuri declined to comment on the issue, saying client confidentiality prevents him from talking about a particular company.
Meanwhile, Civil Aviation Minister Ajit Singh said the recent action taken by the ministry like allowing fuel import and relaxing FDI cap make airline business plan more viable.
“So, if the banks can loan them money, it is all good,” Singh said.
When asked if SBI has given loan to Kingfisher Airlines, Finance Minister Pranab Mukherjee said, “I cannot comment on it now. As and when events take place you will come to know.”
Singh also said, “We have made it clear and I am sure Mr. (Vijay) Mallya knows that Air India is a government concern. Whatever help we give them (Air India), we cannot do it to any private industry.”
Kingfisher Airlines Chairman Vijay Mallya said, “The fact is we have never asked for a bailout (from the government). I would never have thought about that. I know exactly the constraints in this country with private enterprise. So this entire sort of bailout issue which media is making, we have never asked to bail us out.”
At the same time, Central Board of Excise and Customs Chairman S.K. Goel said, “Kingfisher had an outstanding tax due of Rs. 70 crore and had promised to pay in installments.” The company paid Rs. 10 crore in December, Rs. 20 crore in January and are due to pay Rs. 20 crore in February, he said.
Kingfisher has suffered a loss of Rs. 1,027 crore in 2010-11 and has a debt of Rs. 7,057.08 crore, latest figures show.
The Kingfisher Airlines cancelled about 20 flights on Wednesday.