The Kingfisher Board also had a crucial meeting in Mumbai to work out a debt restructuring plan on the eve of the announcement of its latest financial results. The bankers have asked the troubled airline to come out with a "credible" plan.
The lenders--a 13-bank consortium led by SBI, who were yet to decide on ways to soften the troubled airline's Rs 7057.08 crore debt burden, are due to meet Kingfisher management here tomorrow.
The bankers have made it clear that the promoters have to put in at least Rs 800 crore worth of fresh equity as the lenders cannot act as promoters of the airline.
"Bankers want more information on their fleet, equity, continuation of fuel supply. Banks can come in as lenders not promoter. We will respond how it unfolds," said Pratip Chaudhuri, Chairman of SBI which leads the 13-bank consortium that has financed Kingfisher.
On whether the bank will consider making fresh advances to Kingfisher, SBI Managing Director Hemant Contractor said, "We have to be satisfied about the viability of the company. There is no point restructuring if the company's operations are not going to be viable.
"We have asked them to come up with some fresh funds if the banks are to at all consider their request for restructuring. We want to see more funds coming from the company itself..." SBI has the largest exposure to Kingfisher--Rs 1,400 crore--among the lenders.
Amid the debate over bailout for Kingfisher, SpiceJet chief Neil Mills said the government should not use taxpayers' money to revive a private sector company.
Mallya on his part said he is not seeking taxpayers money.
"No bail out involving tax payers money. V want working capital management assistance." he said in his latest tweet.
The debt-ridden airline continued with flight cancellations for the eighth straight day. The airline did not operate at least 40 flights today.
With Prime Minister Manmohan Singh saying that the government would consider ways and means to help his airline come out of the crisis, Mallya said in another tweet: " The Hon'ble PM is an economist and understands the importance of connectivity that goes together with economic growth. Why such debate (on bailout) then?"
He also criticised the media for using the term 'bailout' and making the matter "so sensational".
Amid the talk of Kingfisher seeking government assistance, Bajaj group patriarach Rahul Bajaj said yesterday private sector should not be bailed out and "those who die must die". Opposition parties including BJP and CPI-M have opposed any bailout for the private airline.
Echoing Bajaj's sentiments, SpiceJet's Mills told PTI "It is the private sector. Why should there be any bailout for a private air carrier. I do not see any logic why taxpayer's money should be used to bail out a private company.
As Kingfisher struggled to resolve the crisis, Reports said aircraft lessors wanted to take back their planes, including turboprop ATR aircraft, for alleged delays in lease payments.
Chaudhuri supported Mallya's view on allowing foreign airlines to pick up stake in Indian carriers.
"Unless another airline joins in, we don't see much of value being added to Kingfisher ...
They have said that they are waiting for government to relax norms on aviation policy. There is clear indication that Kingfisher wants to induct foreign airline as equity partner," Chaudhuri said.
He said the airline's lenders have asked it to bring Rs 800 crore as the equity, of which the company said that Rs 400 crore has already been arranged.
Kingfisher is looking for additional working capital to tide over its severe cash crunch. It approached lender-banks for a reappraisal of working capital requirements following a surge in price of fuel in recent months.
The 13-bank consortium has also set up a core bankers' committee to vet the additional financial details provided by the airline management.
