Kingfisher must find more backing by Nov 30 - lenders

MUMBAI Tue Nov 6, 2012 11:07pm IST

A passenger walks with her luggage in front of a Kingfisher Airlines reservation office at the domestic airport in Mumbai October 23, 2012. REUTERS/Danish Siddiqui

A passenger walks with her luggage in front of a Kingfisher Airlines reservation office at the domestic airport in Mumbai October 23, 2012.

Credit: Reuters/Danish Siddiqui

Stocks

   

MUMBAI (Reuters) - Kingfisher Airlines (KING.NS) creditors have asked it to bring in fresh equity or an investor by November 30, the chairman of State Bank of India told Reuters.

Kingfisher may not be able to fly if it does not infuse enough capital, hurting its ability to get investors, Pratip Chaudhuri said on Tuesday. He did not say what steps the lenders would take if it was not able to infuse capital by the deadline.

State Bank of India is the leader of a 17-bank consortium, which has lent about $1.4 billion to the debt-ridden carrier.

On Monday, a source told Reuters Kingfisher's licence to fly will not be renewed if the carrier fails to provide a turnaround plan by end-December.

Kingfisher, once India's second-largest airline, has not flown since the start of October after a protest by employees, unpaid since March, turned violent.

"Kingfisher must bring in investor or equity by November 30. We have given them enough time," Chaudhuri said on Tuesday. "It can't go on like this. (The) Kingfisher loan has been non-performing on our books for over a year."

Lenders will meet company senior executives next week to discuss a turnaround plan, S. Vishvanathan, managing director of the State Bank of India, separately told Reuters.

The Directorate General of Civil Aviation (DGCA), suspended its licence last month after Kingfisher, controlled by liquor baron Vijay Mallya, failed to address its concerns over safety.

It has since managed to convince striking staff to come back to work, but it still needs to come up with a revival plan that satisfies the regulator to fly again.

(Reporting by Swati Pandey; editing by Patrick Graham)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Diesel Deregulation

Diesel Deregulation

Oil ministry to seek Cabinet nod on diesel deregulation - sources  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage