State Bank of India, the leader of the consortium of banks that have lent to the grounded Kingfisher Airlines, on Wednesday said the banks are trying to do everything possible to find an amicable solution to the carrier’s financial troubles.
“They (KFA) have created a brand value, they are a good company and we are trying to do everything so that an amicable solution to the problem is found,” said Diwakar Gupta, Managing Director and Chief Financial Officer, SBI, on the sidelines of a PwC event.
The Bangalore-based airline owes about Rs 7,000 crore to a consortium of 17 banks. KFA owes about Rs 1,500 crore to SBI. The cash-strapped airline has accumulated losses of nearly Rs 10,000 crore.
SBI Chairman Pratip Chaudhuri had asked the airline management to infuse at least $1 billion by November 30 for reviving the airline. If this had come through, banks would have considered lending afresh or recasting their existing loans to KFA. However, the airline promoter has not brought in his equity contribution so far.
Since its inception in 2005, the airline has not reported any profit. The losses of Kingfisher Airlines widened to Rs 754 crore for the September quarter this fiscal as compared with Rs 469 crore in the year ago period.
The airline has been grounded since October 1, following a strike by its pilots and engineers over non-payment of salary. Consequently, the Director General of Civil Aviation suspended the airline’s flying licence on October 19. The airline officials have not been able to sort out regulatory issues that are imperative for it to resume operations.
In a further blow to the beleaguered airline, the cash-strapped carrier may have to vacate the space it occupies at Mumbai Airport. The Mumbai airport authorities may issue an eviction notice after the grounded carrier failed to respond to an earlier notice asking it to clear the Rs 22 crore dues towards parking and navigation charges.