Bank bailout for Kingfisher hangs in balance

New Delhi/Mumbai: Lenders to Kingfisher Airlines have not agreed to extend further loans to the debt-crippled carrier, three banking sources said on Wednesday after reports that State Bank of India (SBI) was close to offering a bailout loan package.
Several newspapers reported that SBI would throw a lifeline to Kingfisher, which is majority owned by liquor baron Vijay Mallya, giving figures ranging from 2.0 to 16.5 billion rupees.
But banking sources, with direct knowledge of the situation, told Reuters the airline's consortium of 16 lenders, which includes SBI, were still studying a debt-restructuring proposal put forward last week. Banks own about a quarter of the carrier through an earlier debt-for-equity swap.
"I don't think any individual bank can take a decision," said a source at the Punjab National Bank, India's second-largest public sector lender. "It will have to be decided by the consortium."
SBI's chief financial officer, Diwakar Gupta, declined to comment on the reports of an imminent rescue package.
Desperately strapped for cash, Kingfisher Airlines stands on the brink of collapse after nearly a week of flight cancellations and the resignation of dozens of its pilots.
22/02/12 Reuters/Times of India

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Categories: Kingfisher Feb 2012