Lenders bide their time on KFA debt

On the proposed meeting of lenders with a total exposure of about Rs 7,500 crore to cash-strapped Kingfisher Airlines (KFA), the Deputy General Manager and Zonal Head, Bangalore-South, Corporation Bank, N Vijaya Kumar said lenders are awaiting the report of investment bank and project advisor SBI Capital Markets Ltd on KFA’s financial viability, following which they will take a call on the meeting.

The meeting was slated to be held on October 30, when Kingfisher Airlines Chairman Vijay Mallya was expected to come up with an update on the revival plan for the stricken airline, as well as his “talks” with overseas strategic investors.

Another lender said that while recovery of debt itself will be an uphill task given the current state of affairs at the airline, lenders will have to make substantial provisions to their equity holdings in KFA. Financial institutions and banks held 10.65 crore shares, or 18.45 per cent of KFA’s share capital as on March 31, 2012.