M A I N   N E W S

Infuse Rs 800-cr equity, bankers tell Kingfisher
Tribune News Service & PTI

Mumbai/New Delhi, Nov 14
Bankers to the cash-strapped Kingfisher airline today asked its promoters to infuse Rs 800 crore worth of fresh equity if they are to consider a second restructuring of the existing debt as opposition mounted to any bailout of the private carrier.

Criticism by Opposition parties and industry has prompted the Congress to say that PM Manmohan Singh never talked of the Centre’s bailout to the beleaguered private carrier. “I don’t think the Prime Minister said the government was going to bail out Kingfisher Airlines,” Congress spokesperson Renuka Chowdhury said today, responding to open disapproval of the BJP, the Left, the JD (U) and privately, even members of the ruling party, that followed the Prime Minister’s statement that the government might consider lending a helping hand to the Vijay Mallya-owned airline.

The Kingfisher Board also had a crucial meeting in Mumbai to work out a debt restructuring plan on the eve of the announcement of its latest financial results.

On the Kingfisher airlines bailout issue, the Prime Minister is reported to have said, “Private sector airlines have to be managed efficiently. But if they do get into difficulties; we have to find ways and means to help them to get out of the process. But I have not applied my mind to Kingfisher’s problems. When I get back, I will talk with Mr Vayalar Ravi and we will explore ways and means through which the airline can be helped.”

The bankers have asked the troubled airline to come out with a "credible" plan.

The lenders - a 13-bank consortium led by the SBI, who were yet to decide on ways to soften the troubled airline's Rs 7057.08 crore debt burden - are due to meet Kingfisher management here tomorrow.

The bankers have made it clear that the promoters have to put in at least Rs 800 crore worth of fresh equity as the lenders cannot act as promoters of the airline.

"Bankers want more information on their fleet, equity, continuation of fuel supply. Banks can come in as lenders not promoter. We will respond how it unfolds," said Pratip Chaudhuri, Chairman of SBI which leads the 13-bank consortium that has financed Kingfisher.

On whether the bank will consider making fresh advances to Kingfisher, SBI Managing Director Hemant Contractor said, "We have to be satisfied about the viability of the company.

SpiceJet chief Neil Mills said the government should not use taxpayers' money to revive a private sector company. Mallya on his part said he is not seeking taxpayers money. "No bail out involving tax payers money. V want working capital management assistance." he said in his latest tweet.

The debt-ridden airline continued with flight cancellations for the eighth straight day. The airline did not operate at least 40 flights today.

Joining the growing indignation, JD (U) chief Sharad Yadav said it would set a bad precedent and losses incurred by the private airline should be recovered from the liquor company UB Group.

The “mismanagement and over-indulgence” of Mallya “in things like Formula-1 race and the IPL” and the government’s overlooking “moral issues” has left Congress leaders fuming too.

Congress leaders have warned that any bailout-related move by the government will result in other loss-making airlines asking for similar relief.