Lenders to start recovery of Kingfisher Airlines' loans

Wed Feb 13, 2013 12:05am IST

Kingfisher Airlines customers wait in a check-in queue at Mumbai's domestic airport March 20, 2012. REUTERS/Vivek Prakash

Kingfisher Airlines customers wait in a check-in queue at Mumbai's domestic airport March 20, 2012.

Credit: Reuters/Vivek Prakash

Stocks

   

REUTERS - Lenders to grounded Kingfisher Airlines(KING.NS) have decided to take initial steps towards recovering $1.4 billion of loans in default after the company failed to come up with a viable funding plan.

"How long can we wait?" said Shyamal Acharya, deputy managing director at State Bank of India, after a meeting of lenders late on Tuesday. The bank is the leader of the 17-bank consortium and is directly involved with the loans.

Kingfisher Airlines, owned by the flamboyant Vijay Mallya, has not flown since October 2012 after operations were halted due to a cash crunch. Its lenders had first declared the company's loans in default in early 2012 but held back recovery after the carrier's promises of capital infusion.

Kingfisher said in December it was in talks with several investors, including gulf carrier Etihad for stake sale but those hopes have faded as the airline continues to be grounded and expands its losses.

Debt-ridden and with no customers, Kingfisher posted a 7.55 billion rupees loss in the three months to December 31 as its planes sat idle, and regulators rebuffed its revival plans.

A decision on further action will now be taken by the boards of the 17 creditor banks, after which the consortium will take decisions on valuing the assets and potentially pursuing legal options, Acharya said, adding it is a lengthy process.

A Kingfisher spokesman had no comment.

(Reporting by Swati Pandey in MUMBAI; Editing by Hans-Juergen Peters)

Politics of Religion

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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