An independent firm of chartered accountants may soon start monitoring the accounts of debt-laden Kingfisher Airlines.
The consortium of 17 banks, which have an exposure of about Rs 7,000 crore to Kingfisher, will meet in Mumbai on Wednesday to discuss this issue, sources in the banking industry said.
The appointed chartered accountant will have to enter into a non-disclosure agreement before going ahead with the monitoring task.
The meeting, which will be chaired by the State Bank of India Chairman, Pratip Chaudhuri, will also see the airline’s representatives making a presentation on the audit certification for the quantum of Group funds so far brought into the airline by its promoter, they added.
The prospect of the banks taking a significant hit on their exposure to the airline has prompted them to rope in an external auditor to monitor its accounts.
The market is abuzz with rumours that the promoters could use the proceeds of stake sale in certain UB Group companies to bring down the level of personal guarantees furnished by Vijay Mallya to the lenders’ consortium for their funding of the airline.
The airlines’s net loss in 2011-12 stood at Rs 2,328 crore, more than double its net loss of Rs 1,027 crore in the previous year.
Its total long-term borrowings stood at Rs 5,695 crore as on end March 2012, lower than Rs 6,306 crore a year-ago.
At Wednesday’s meeting, the consortium will discuss the future course of action considering the airline’s continuing failure to come up with viable plan of action. Invocation of securities and guarantees provided by the promoter could be discussed, sources added.
As the lenders’ are to meet after a span of two months, they are also likely to discuss the position of accounts of the airline with the consortium banks.