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Corporate Jan 18, 2013

KFA meet inconclusive; lenders want fresh fund infusion

Mumbai: A meeting between the core lenders group and the grounded Kingfisher Airlines, which is trying to resume operations by next month, ended inconclusively here this evening, as the airline failed to table a concrete revival plan.

The lenders group, led by State Bank, has PNB, BoB, Bank of India and IDBI Bank as other members. Kingfisher owes over Rs 7,500 crore and one-year's accrued interest to 17 banks.

The banker, who did not wish to be named, also said that all the 17 lenders will meet again towards the end of the month to take a stock of the revival plan. Reuters

While the airline was represented at the meeting by UB Group President and Chief Financial Officer Ravi Nedungadi, and airline Chief Executive Sanjay Agarwal, the bankers were represented by mid-level officials.

One of the bank officials present said later that bankers insisted that KFA must clear at least a part of the vendor and salary dues without which no revival plan could be worked out. But he did not quantify the amount the bankers have sought.

The airline owes close to Rs 1,800 crore in salary dues, tax arrears and vendor/lessor fees and airport charges. The airline, which never reported a profit since inception in May 2005, is also saddled with over Rs 7,500 crore in bank debt and over Rs 8,000 crore in accumulated losses.

The banker, who did not wish to be named, also said that all the 17 lenders will meet again towards the end of the month to take a stock of the revival plan. The lenders also categorically ruled out any fresh loans or restructuring without fresh capital infusion by KFA. At the last meeting on December 17, the airline had told the lenders that promoters would bring in Rs 425 crore as a part of revival plan.

Kingfisher is grounded since October 1, following a staff strike over salaries and suspension of flying license.

PTI

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