Mallya may mortgage prime assets

Bangalore: The ''King of Good Times'', Vijay Mallya, is now pushed into a corner as bad times in the form of troubled Kingfisher Airlines have hit him.
Banks have told him to pump in Rs 800 crore into the company which may force Mallya to either liquidate or mortgage some of his prime assets to raise funds for the hugely loss-making and debt-ridden Kingfisher Airlines.
The accumulated loss of the airline, second in terms of market share with 19 per cent of the domestic market, has reached around Rs 6,000 crore. It also owes Rs 6,200 crore to 13 banks who have lent money and another around Rs 1,000 crore to oil companies and airports.
“We have asked them (the UB group) to come up with some fresh funds. One thing that is being discussed is selling some of its assets. If they do it, it is good or they would have to find some other means,” State Bank of India (SBI) Managing Director Hemant Contractor on Monday told reporters on the sidelines of the World Economic Forum, being held in Mumbai.
Talking to news agencies in Kolkata on Sunday, SBI Chairman Pratip Choudhuri said bankers want more information on their fleet, equity, continuation of fuel supply.
SBI is the lead banker of a 13-bank consortium that financed Kingfisher.
The Centre for Asia Pacific Aviation, an aviation consulting firm, estimated that Kingfisher will need at least $ 400 million or around Rs 4,000 crore. As per the lenders’ demand, Mallya and his companies need to raise bulk of this fund and the balance can come from banks.
Kingfisher Board met in Mumbai Monday evening to decide on fund raising proposals and also to approve the company’s financial results for the quarter ended September 30, 2011. Mallya will announce the decision on Tuesday and also meet the bankers to present his plan to raise funds.
14/11/11 Deccan Herald

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Categories: Kingfisher Nov 2011