Coming out with a revival plan for Kingfisher Airlines, Vijay Mallya, chairman UB Group, has told bankers that he will infuse an equity of Rs 425 crore in order to have a limited restart of the operations, the timeline of which will depend on clearances from Directorate General of Civil Aviation (DGCA).
The consortium of bankers, led by State Bank of India (SBI), is not against another restructuring of the loan if they are satisfied with the details of the restart plan. In a meeting with its lenders in Mumbai on Monday, Mallya laid out his plans for the airline and said that he was not looking for funds from the banks.
“They have a plan for a limited restart,” said Shyamal Acharya, deputy managing director, SBI. “For the limited restart they feel that they need Rs 425 crore which they will manage themselves and they are working with DGCA on the restart.” While the DGCA requires at least five aircraft for an airline to start operations, Acharya said that they may start with a certain number and go up within 3-4 months. The banking consortium has also formed a small group of bankers (SBI, BoI, BoB, PNB and IDBI) to discuss the details of the limited restart plan with the airline.
“If the limited restart takes place as he discussed, and if the small group of bankers is satisfied with the details of that restart plan then we are not averse for a restructuring,” said Acharya after the bankers meeting with Mallya, Ravi Nedungadi, CFO, UB Group and Sanjay Agarwal, CEO, Kingfisher Airlines.
The banks are expected to meet the airline officials in the next 3-4 days to discuss the details of the plan.
Acharya said, “Their licence is suspended but they are comfortable, hopeful and confident that there is no case for final cancellation of the licenses.” The banker also said that Mallya spoke about discussions going on with foreign investors for a stake sale in the airline. While there have been reports of discussions with Etihad for a stake sale, the banker said that Mallya did not reveal the name of the investors.
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