Corporate Feb 21, 2012
While Kingfisher Airlines, in its meeting with the DGCA, said that it is working on getting the freeze on its accounts lifted, sources have told CNBC-TV 18 that its lenders who are scheduled to meet later this week, could agree to pump in Rs 1,000 crore, and sanction a Rs 400 crore working capital loan as part of SBI Cap's viability report.
After witnessing a plunge of almost 20 percent in intra-day trade on Tuesday, the airline recovered towards closing, after reports said that bankers may approve a sum of Rs 500 crore to meet the airline's interest obligation.
Sources in the know have said that the airline's lenders will soon take a final call on the new debt restructuring package.
The airline's CEO Sanjay Aggarwal met officials of Directorate General of Civil Aviation (DGCA) on Tuesday to explain why flights are being cancelled.
After Kingfisher stopped making interest payments, all banks turned its account into bad loans or non-performing assets. But since the banks are both lenders as well as equity holders in Kingfisher, it is very difficult for them to allow the airline to sink.
The carrier requires an additional working capital of around Rs 2,300 crore to keep afloat. But CNBC-TV18 reports that lenders will insist on additional equity infusion by the promoters of Kingfisher before they take a final call. However, there is is no official word from either the lending banks or the airline on this yet.
The thirteen lenders, including ICICI Bank and SBI, have a total exposure of around Rs 6,400 crore towards the airline. In April they bought 23.27 percent in the airline, following a debt recast this year.
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