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SBI Has No Plan To Give Fresh Loan To Kingfisher, Says FM

PTI [ Updated 13 Mar 2012, 19:59:27 ]
SBI Has No Plan To Give Fresh Loan To Kingfisher, Says FM

New Delhi, Mar 13: State Bank of India(SBI) has no plan to provide fresh loan to the cash-strapped Kingfisher Airlines, Finance Minister Pranab Mukherjee said today.

“SBI has informed that currently there is no such plan to provide additional loan to Kingfisher Airlines,” he said in the Rajya Sabha to a question as to whether the SBI had initiated a proposal to bail out the airline by sanctioning fresh loan of Rs 1,500 crore.

Kingfisher airlines has a debt of Rs 7,057.08 crore and the financial crunch has hit its operations with dozens of flights being either cancelled or clubbed.

Tax authorities have added to its woes by freezing its bank accounts for non-payment of taxes.

Asked about total exposure of SBI and other banks to the Vijay Mallya-promoted airlines at the end of the current fiscal, Mukherjee said “since the accounts as on March 31, 2012 are to be finalised, it is not possible to ascertain the outstanding of KFA”.

He also said that SBI, leader of consortium of lenders to the air-carrier, has informed the account of the airlines is ‘sub-standard’ with eight public sector banks (PSBs) and ‘standard’ with five PSBs as on February 2012.

“Consortium agreed to ‘holding on operations’ whereby a portion of the credits into the account are appropriated for reducing irregularities in the accounts of banks,” he said.

However, all interest and dues up to August, 2011 have been paid, he said.

The consortium of the lending banks have been meeting regularly to deliberate and decide upon the course of steps to be taken. The last such meeting was held on February 17.

Badgered from all sides, Kingfisher Airlines was last week suspended for non-payment of dues from three IATA platforms affecting its passenger and cargo bookings through agents.

Kingfisher’s suspension from the IATA Clearing House (ICH) implied that it would not be able to settle accounts for services provided to them by other airlines or related companies.

The airline was hit hard on Saturday when state-run HPCL stopped jet fuel supplies, causing some cancellations and delays to some other flights. Fuel supplies were, however, resumed on Sunday. Kingfisher owes Rs 515-520 crore in fuel bills along with interest.

Kingfisher, which reported a net loss of Rs 444.26 crore in the December quarter, has never made a profit since inception in May 2005. It suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of Rs 7,057.08 crore.