JOIN USAfter failing to convince aviation regulator with a convincing revival plan that led to expiry of its flying permit on December 31, 2012, a senior UB group executive and CFO of Kingfisher Airlines (KFA) attended a meeting called by a group of six public sector lenders at a meeting on Friday.
The two-hour meeting between the lenders - State Bank of India, Bank of India, Bank of Baroda, Punjab National Bank, IDBI Bank and United Bank of India - and Ravi Nedungadi, President and CFO of UB Group, and A Raghunathan, CFO of KFA did not yield much result, according to sources.
One of the bankers told Deccan Herald on condition of anonymity: “There wasn't any concrete plan of infusion of fresh equity. The airline is awaiting approval from the Director General of Civil Aviation (DGCA) to recommence operations. The two executives also said that they are talking to foreign investors to bring fresh equity but did not name anyone as such.”
He said it’s natural that lenders are more worried now, after KFA's licence expired on December 31, 2012, and are keen to see the promoters bring in money. “Unless the money is there on the table, there is no question of lenders feeling confident,” he added.
KFA had accumulated losses of about Rs 7,250 crore and debt of Rs 7,000 crore as on September 30, 2012. It has been off-air since October 1, first due to employees' striking work over non-payment of salaries and then the aviation regulator suspending its licence, which in turn has resulted in a plethora of never-ending woes . Its inability to rope in any fresh investor has precipitated matters for itself and its lenders, leading to a stalemate that is increasingly becoming intractable.
Arun Mishra, DGCA, told Deccan Herald on Friday that there has been no forward movement from KFA with regard to any revised revival plan, after the expiry of its licence on December 31, 2012.
The share price of KFA closed at Rs 14.43 on the Bombay Stock Exchange on Friday, down 2.37 per cent from its previous close.