Mumbai: The State Bank of India (SBI), which extended Rs. 7,000 crore loans to the now grounded Kingfisher Airlines, stated some words confirming their support to the company. They said that the banks are trying everything to find a friendly solution to the financial troubles of the company.
The SBI comment comes a week after the expiry of deadline that the lenders had set to the airline management to come up with a revival plan that includes a $1 billion capital infusion.
‘Kingfisher is a good company with a high brand value and lenders are trying to do everything to see that a harmonious solution is found,’ said Diwakar Gupta, SBI Managing Director and Chief Financial Officer, on the sidelines of a PwC event.
After the regulator DGCA suspended the airline’s flying licence on October 19, SBI Chairman Pratip Chaudhuri had set a November 30 deadline to the airline management to infuse at least $1 billion in fresh capital as part of the revival exercise for the banks to consider lending afresh or recasting the existing loans.
SBI has an exposure of Rs 1, 500 crore to the Bangalore based airline, which has not been serviced since January this year.
Launched in May 2005, the airline has not reported a single penny in profit and has bank debt over Rs 7, 000 crore and unpaid interest thereon since January, apart from over Rs 1, 000 crore in vendor and tax arrears.
It also has accumulated losses of nearly Rs 10, 000 crore, apart from the salary dues of the past seven months.
Labour unrest towards the end of September led to the airline suspending operations from October 1 and on 19th of the same month, the regulator DGCA had suspended its flying licence.