Lenders to Vijay Mallya’s troubled Kingfisher Airlines will meet on Thursday with the latter’s management to discuss the course of action.
Banks have been asking the promoter for equity infusion, as was agreed earlier during the loan restructuring. The meeting will be in Bangalore. In the previous meeting, bankers had demanded Mallya be personally present in the next interaction.
Despite the debt recast, Rs 8,000 crore of loans to KFA has become non-performing and State Bank of India (SBI), Punjab National Bank, Bank of India and Bank of Baroda have had to make provision for this in their balance sheets.
The meeting would be the bankers’ first interaction with the KFA management after the foreign direct investment (FDI) rules in the aviation sector were loosened. Mallya is also talking to liquor maker Diageo to sell a 49 per cent stake in Whyte & Mackey, the Glasgow-based subsidiary of his UB Group.
“We have heard nothing concrete from them (Kingfisher) after the policy relaxation on FDI. Newspaper reports say they are in talks (with foreign airlines to divest stake). I am sure Mallya will come to us when he has something tangible,” SBI Chairman Pratip Chaudhuri said.
SBI, leader of the lenders’ consortium, has exposure of Rs 1,400 crore. IDBI Bank has one of Rs 727 crore, Bank of India has Rs 575 crore and Bank of Baroda has Rs 537 crore.
Recently, ICICI Bank sold its entire KFA exposure of Rs 430 crore to a debt fund run by Kolkata-based Srei Infrastructure Finance.
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“The brand Kingfisher is very important for Mallya and the talk of selling non-core assets like Mangalore Refineries is welcome,” Chaudhuri said.
Adding, “Mallya is keen to keep control of Kingfisher...The sense we have from him is that he is willing to do everything possible, including big sacrifices.”
SBI sources said Kingfisher had informed the banks he was talking to Etihad Airways for divesting a part of its stake. Interestingly, KFA’s domestic competitor, Jet Airways, has also initiated a discussion with Etihad after FDI was opened in this sector last week.