End nears for Kingfisher as lenders pull the plug
13 Feb 2013
Kingfisher Airlines has been brought to the brink of extinction as its consortium of lenders, comprising mainly public sector banks, have decided to pull the plug and start the process to recover Rs8,500 crore in dues after owner Vijay Mallya failed to pay the debt.
''We have decided to start recovery process on the loans to Kingfisher,'' Shyamal Acharya, deputy managing director of State Bank of India – the airline's biggest single lender - said late on Tuesday. ''Banks have already given Mallya enough time to repay.''
''We (the full consortium of banks) first met in December. After that, there were two small group meetings. The consortium has given the airline almost two months' time but they have not been able to come up with any concrete development on any front.
''The consortium felt that it will be difficult to give the airline any more time, so it is a case for terminating the relationship,'' Acharya said.
Now, each bank will brief its board about the position and a final decision will be taken by the consortium in the next seven to 10 days.
On the basis of yesterday's decision, if the bankers decide to recall the loans, legal action will follow, Acharya said.
