Kingfisher Must Find More Backing by Nov 30, say Lenders
November 7, 2012 2:45 PM EST
Kingfisher Airlines creditors have asked it to bring in fresh equity or an investor by November 30, the chairman of State Bank of India told Reuters.
Kingfisher may not be able to fly if it does not infuse enough capital, hurting its ability to get investors, Pratip Chaudhuri said on Tuesday. He did not say what steps the lenders would take if it was not able to infuse capital by the deadline.
State Bank of India is the leader of a 17-bank consortium, which has lent about $1.4 billion to the debt-ridden carrier.
On Monday, a source told Reuters Kingfisher's licence to fly will not be renewed if the carrier fails to provide a turnaround plan by end-December.
Kingfisher, once India's second-largest airline, has not flown since the start of October after a protest by employees, unpaid since March, turned violent.
"Kingfisher must bring in investor or equity by November 30. We have given them enough time," Chaudhuri said on Tuesday. "It can't go on like this. (The) Kingfisher loan has been non-performing on our books for over a year."
Lenders will meet company senior executives next week to discuss a turnaround plan, S. Vishvanathan, managing director of the State Bank of India, separately told Reuters.
The Directorate General of Civil Aviation (DGCA), suspended its licence last month after Kingfisher, controlled by liquor baron Vijay Mallya, failed to address its concerns over safety.
It has since managed to convince striking staff to come back to work, but it still needs to come up with a revival plan that satisfies the regulator to fly again.
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