Lenders are keenly awaiting the outcome of talks that promoter of the grounded Kingfisher Airlines (KFA) has initiated with investors to offload his stake.
The Vijay Mallya-promoted private carrier on Tuesday said it is in discussions with various investors, including Etihad Airways, for equity investments in the company.
“We are only hearing that they (KFA promoters) are in talks. However, there is no sign that they have made any headway.
“We are hopeful that this time around they will come up with firm plans, including for equity infusion, for reviving the airline,” said a senior official with one of the bank’s having an exposure to KFA.
A lenders’ meeting has been scheduled on December 17 to consider the road ahead for the beleaguered airline, which owes about Rs 7,000 crore to 17 banks. The KFA account has been classified as a bad loan by all banks.
May impose conditions
To protect their interests, banks could impose conditions on the stake sale by the airline’s promoter to an investor, said the banker.
Banks have taken the position that they will extend a line of credit to the airline only if the promoter pumps in equity.
KFA, in a notice to the BSE, said no agreement has been reached either with Etihad or any other airline and the matters are merely at a negotiation stage.
Further, the company said it has been attempting to raise much-needed capital over the last two years pursuant to shareholders resolutions approving the same.
Among others, the airline has run into rough weather due to internecine competition, volatile prices of aviation turbine, acquisition of low-cost carrier, and employees striking work due to non-payment of salaries.