Kingfisher dues: Banks to meet on Feb 12 to initiate recovery proceedings

BS MUMBAI, FEB. 8:2013  

A consortium meeting of 17 lenders led by State Bank of India is likely to take a call on February 12 on initiating recovery proceedings, including change of management, against the beleaguered Kingfisher Airlines, said a senior banker clued in to the development.

With no sign of either capital infusion or a strategic partner being roped in to revive the grounded KFA, banks are facing a tough call on how to recover the Rs 7,000 crore they lent to the airline.

The KFA loan account has become a non-performing asset for almost all the banks concerned. If banks press for recovery, then they may be able to recover just about 20 per cent of their loans.

The airline’s management has held several parleys with banks in the last one year or so to get banks to loosen their purse strings. However, banks first want the promoters to pump in funds into the airline as it will serve as an assurance that they are serious about its revival, said a banker.

POWER SUPPLY CUT

Meanwhile, spelling fresh trouble for KFA, the power supply to the airline’s Mumbai office, The Qube, was snapped last week for non-payments, according to sources.

While the amount of unpaid electricity bills could not be ascertained, the airline employees’ were reportedly asked not to attend office till further orders. The once second-biggest airline of the country has been grounded since October 1 last year and lost its flying licence on December 31.

KFA promoter Vijay Mallya on Thursday met Law Minister Ashwani Kumar in Delhi to reportedly discuss ways/alternate solutions to deal with the situation.

The grounded Kingfisher Airlines reported a loss of Rs 755 crore in October-December 2012.

Apart from salaries to employees, the airline has outstanding service tax dues and payments to oil companies . Besides, the airline has huge debts to the lessors of its aircraft and to Airports Authority of India (AAI). The airline owes Rs 290 crore to AAI towards landing and parking fees.

AAI has insisted on dues being cleared before the airline is allowed to fly again by aviation regulator DGCA.