Lenders to the beleaguered Kingfisher Airlines (KFA) will put their heads together on Thursday to take stock of the situation arising from the partial lock-out declared by the airline management.
At stake for the consortium of 17 lenders, including State Bank of India, IDBI Bank, Bank of Baroda, and Bank of India, is their collective exposure aggregating Rs 8,000 crore to the Vijay Mallya promoted KFA.
SBI, the lead bank to the cash-strapped airline, has called for the meeting. It is believed to have made almost 100 per cent provisioning towards its exposure of Rs 1,400 crore.
The meeting assumes added urgency as some KFA pilots, engineers and other staff have gone on strike due to non-payment of wages. Moreover, the aviation regulator has raised red flag over safety issues.
The KFA management is expected to update bankers on the ground situation and the efforts being made to revive the airline.
Though Mallya sought Rs 200 crore credit line for KFA at a recent meeting, bankers’ were cold to his request. They want him to bring in equity before loosening the purse strings.
Mallya is believed to be in talks with foreign investors and airlines for attracting foreign direct investment in his airline.
“If things (FDI into KFA) don’t work out, we will try to salvage whatever (collateral) possible,” said a banker.
The collateral with banks is the form of aircraft, properties in Mumbai and Goa, personal and corporate guarantees.