Mumbai: In a major relief to to cash strapped Kingfisher Airlines, Subrata Roy has extended a helping hand by giving a loan of around Rs 750 crore to the struggling airline according to three sources familiar with the development.
The loan has been extended via inter-corporate deposits (ICD), eventhough the there was no clarity at what interest rate the loan has been given. The deal was directly structured by Vijay Mallya & Subrata Roy. Inter-Corporate Deposit (ICD) is an unsecured borrowing by corporates from other corporate entities registered under the Companies Act 1956.
The corporate having surplus funds would lend to another corporate in need of funds. This lending would be an uncollateralized basis and hence a higher rate of interest would be demanded by the lender.
One source said that Sahara may have asked for collaterals to secure the loans, but there was no confirmation for the same.
Kingfisher Airlines spokesman in an email response said that 'the information was not true'. Sahara India declined to comment on the story.
23/12/11 Sameer Hashmi/Economic Times
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