New Delhi: Airlines are unlikely to benefit from the government's decision to permit the loss-making carriers to access external commercial borrowings (ECBs).
"Who is going to lend to them when even the domestic banks are not lending? It is like selecting a player for the Indian test team when he is not even fit to play in the Ranji Trophy," said the chairman of a large bank. Another banker said that local lenders, comprising mainly public sector players, are demanding that airline promoters chip in with equity of Rs 4,000-5,000 crore before additional loan facilities are offered.
The reluctance of lenders could be understood from the fact that the accumulated losses and debt of big players like Jet, Air India, Kingfisher and SpiceJet were Rs 1.18 lakh crore on September 30, 2011. A bank chairman said that RBI would frown on banks which arrange ECBs for airlines.
19/03/12 Times of India
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