Corporate Feb 13, 2013
New Delhi: With Kingfisher lenders deciding to start the process of recovering Rs 7,500 crore outstanding loans from the grounded airline, the government today ruled out renewing its licence unless it ensures a safe and viable service.
"Unless the Directorate General of Civil Aviation (DGCA) is satisfied that the airline can provide safe and viable service, there is no question of renewing the licence," Civil Aviation Minister Ajit Singh told reporters here.
He said the government cannot do much in Kingfisher's case. "What the airline does with the banks is between them," Singh said.
After a two-hour-long meeting with the Kingfisher representatives in Mumbai, the bankers had yesterday said they had decided to begin the process of recovering Rs 7,500 crore outstanding loans from the grounded airline as the company had failed to provide any specific revival plan.
"We have decided to recall (initiating the recovery process) the loans given to Kingfisher Airlines. However, each bank board will decide the future course of action," Shymal Acharya, Deputy Managing Director (Mid-Corporates) of SBI, which is leader of consortium of lenders, had told reporters
Besides five bankers led by SBI, the meeting was attended by the airline's management, including CEO Sanjay Agarwal and UB Group President and CFO Ravi Nedungadi.
The decision came even as Kingfisher Chairman Vijay Mallya had given an assurance to Kingfisher employees on the issue of clearing their salaries for 11 months and restarting operations with the forthcoming summer schedule.
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