Kingfisher Airlines asks for more cushion from banks to ease its debt burden

Mumbai: India's No. 2 carrier Kingfisher Airlines on Wednesday sought further cushion from banks to ease its debt burden, but denied it was seeking another debt restructuring.
The Vijay Mallya-controlled carrier has sought lenders' help to substitute high-cost rupee borrowings with lower-cost foreign currency debt, Ravi Nedungadi, president and group chief financial officer said in a statement on Wednesday.
It has also asked banks to take into account the changes in the rupee-dollar exchange rate as well as international fuel prices as they appraise the carrier's working capital requirements.
India's currency has fallen nearly 11 percent against the dollar since a late July peak, making imported fuel more expensive.
The cash-strapped airline has also sought help from banks to release cash deposited with leasing companies, who give aircraft to Kingfisher on lease against maintenance reserves by providing bank guarantees.
Maintenance reserves income comprises non-refundable reserves and is earned based on aircraft usage.
Nedungadi said that banks were in "active consideration of these requests and there is absolutely no question of another debt recast."
02/11/11 Reuters/Economic Times

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Categories: Kingfisher Nov 2011