‘Doing everything’ to help Kingfisher, says SBI

The State Bank of India (SBI) today said lenders to the badly crippled Kingfisher Airlines are "trying to do everything to find an amicable solution" to the carrier's financial troubles.

Kingfisher is a good company with a high brand value, SBI managing director and chief financial officer Diwakar Gupta told reporters on the sidelines of a PricewaterhouseCoopers event in Mumbai.

SBI is the lead lender in the 17-member consortium, comprising around 13 banks and four other lenders that extended Rs7,000 crore to Kingfisher Airlines, which has been grounded since early October, and is said to be carrying a debt burden of Rs14,000 crore. It owes huge amounts in airport parking and other charges, and is struggling to pay its employees their past dues.

After the Directorate General of Civil Aviation (DGCA) suspended the airline's flying licence on 19 October, SBI chairman Pratip Chaudhuri had set a 30 November deadline for the airline management to infuse at least $1 billion in fresh capital as part of its turnaround attempts for the banks to consider lending more or restructuring the existing loans.

SBI has an exposure of Rs1,500 crore to the Bangalore-based airline, owned by liquor baron Vijay Mallya. The loan has not been serviced since January this year.

The airline has not made a profit since its launch in May 2005, and has bank debts of over Rs7,000 crore plus interest unpaid since January, apart from over Rs1,000 crore in vendor and tax arrears.

It also has accumulated losses of nearly Rs10,000 crore, apart from the salary dues of the past seven months. Labour unrest towards the end of September led to the airline suspending operations from 1 October.