Air Deccan to repay Rs 200 cr to SBI by May 31

Time is literally running out for Air Deccan. It has time till May 31 to bring in new investors or else it runs the risk of going belly up.
By May end it needs to repay Rs 200 crore that it had borrowed from State Bank of India, or SBI. Curiously, the money was borrowed against a proposed equity infusion.
So Captain Gopinath has three weeks to bring new investors on the Board.
For months now the airline has been negotiating with private equity firms like Texas Pacific Group and individual investors such as the Anil Ambani Group to raise over Rs 400 crore, but with little luck.
Air Deccan is trying to overbook -- raising funds from IDBI to pay back SBI, Rs 500 crore in exchange for it's daily ticket collections for the next six months. But for an airline that's losing over Rs 2 crore a day, securitising earnings may push it over the brink.
Sources say even Airbus failed in its attempt to get Air Deccan merge with Vijay Mallya's Kingfisher Airlines. Mallya is willing; can Gopinath afford to say no? Time is running out.
09/05/07 Moneycontrol.com

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Categories: Air Deccan May 2007