New Delhi, Nov 13: Beleaguered Kingfisher Airlines would have to wait some more time for relief as its lenders continued deliberations today towards resolving the crisis, a day after Prime Minister Manmohan Singh said the government would explore ways to help the private carrier.
The cash-strapped airline cancelled 40 more flights today taking the total number of cancelled services to over 250 flights in one week putting thousands of passengers to inconvenience.
Bankers of Kingfisher, who met in Mumbai yesterday, are holding more rounds of talks on its debt restructuring. Kingfisher is looking for additional working capital to tide over its severe cash crunch.
Kingfisher has approached lender-banks for a reappraisal of working capital requirements following a surge in price of jet fuel in recent months.
Civil Aviation Minister Vayalar Ravi has ruled out any bailout package for the airlines but said efforts would be made to help the ailing aviation industry. Asked whether Government had decided on allowing FDI by foreign airlines in India, Ravi told reporters “it is not a matter to be decided in a day. The proposal may come and then it will be considered”. Kingfisher promoter Vijay Mallya is making a strong pitch for allowing foreign airlines to pick up stakes in Indian carriers.
Ravi, who is leaving for Bahrain on a three-day visit from tomorrow, said he hasn't yet met the Prime Minister on problems faced by Kingfisher and the aviation industry. In a tweet, Mallya said foreign governments go “out of the way” to support airlines but a leading industrialist and Bajaj Auto chief Rahul Bajaj said the private sector should not be bailed out by the government and “those who die must die”.
Opposition parties like the BJP and CPI(M) have also opposed any government bailout for the private airline. The Prime Minister, while returning from the Maldives, told reporters “we will explore ways and means in which the airlines can be helped”.
At the same time, he said private airlines should be managed efficiently, “but if they do get into difficulties, we have to find ways and means to help them get out of the process.”
Bankers of Kingfisher, who met in Mumbai yesterday, are expected to have more rounds of deliberations on its debt restructuring. 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.
Meanwhile, industry sources said the 13-bank consortium, led by State Bank of India that has lent to Kingfisher, are not yet ready to provide a bailout package for the debt-ridden company.
After the first round of meeting yesterday, the banks have asked the airline promoters to put more equity into the venture and disclose additional financial details to them. A core bankers' committee has also been set up to vet the additional financial details to be provided by the airline management over the next few days, the sources said.
The bank representatives would meet their respective managements to take a call on the future course of action, the sources said.
Besides SBI, the consortium includes ICICI Bank, IDBI Bank, Punjab National Bank, Bank of Baroda, Bank of India, UCO Bank, Oriental Bank of Commerce and State Bank of Mysore.
Together, these banks now hold a 23.4 per cent stake in the airlines and have an exposure of over Rs 7,700 crore.
ICICI chief Chanda Kochhar said her bank's exposure in the troubled airline was very less and there were no overdues. The airline has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7057.08 crore.