SBI extends Rs 500-cr loan to Kingfisher

Bangalore: State Bank of India (SBI) has agreed to provide Rs 500-crore loan to Kingfisher Airlines, helping the Vijay Mallya-owned airline to meet its immediate cash needs. The airline is in discussions with several banks to raise at least Rs 2,000 crore.
SBI is believed to have cleared a three-year term loan of Rs 500 crore earlier this week. “Kingfisher has an immediate funding gap of around Rs 1,800-2,000 crore. It has been in discussions with a few public sector banks. SBI has cleared Rs 500-crore facility in the past few days, while talks are on with a few other banks,” said a source close to the development.
A Kingfisher Airlines spoksperson declined comment. “It will be inappropriate to offer any comment at this stage as fund raising is an ongoing process and we are bound by confidentiality agreements,” said the spokesperson.
The domestic airlines, faced with mounting losses, have been lobbying hard with the nationalised banks to extend fresh credit facilities. This comes after the private banks declined to extend more loans to the aviation sector.
Kingfisher Airlines is holding talks with three other public sector banks — Bank of India, Bank of Baroda and Punjab National Bank —for raising additional debt facility of Rs 1,500 crore. The airline has raised debts from private banks, mainly ICICI Bank, in the past.
07/05/09 Boby Kurian/Economic Times

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Categories: Kingfisher May 2009