Kingfisher lenders to meet next week: SBI
SBI is the leader of the lenders` consortium which has 18 banks out which 14 are state-owned. The Bangalore-based carrier, which has not been paying salaries to employees for the past four months besides defaulting on tax payments as well as bills to its vendors, has been seeking fresh bank funding since last December apart from raising overseas funds.
The banks are yet to take a call on the viability report worked out by SBI Capital Markets. "Let us not forget that airline chairman Vijaya Mallya runs a very successful alcohol business, so his ability to fund this business is significant," Chaudhuri said. Bankers have been resisting the demand saying the promoters, including Mallya, have to bring in at least Rs 2,000 crore as fresh capital to consider the demand.
"Kingfisher has not been able to get equity… so it (the financial crisis) still persists… and so it`s going from bad to worse," he added. When asked whether banks are planning recovery process from KFA, Chaudhuri said it is difficult to set a timeline to initiate the debt recovery process. Chaudhuri said the airline has never said so, adding that "They have said we have temporary difficulties".