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New Delhi, Hindustan Times, By: Mahua Venkatesh, In a major shift from its earlier stand, the consortium of 13 banks that has a Rs 7,700-crore exposure to the bleeding Kingfisher Airlines has indicated that it could agree to provide about Rs 600 crore of additional working capital required by the carrier to tide over its financial crisis. However, the banks led by the State Bank of India (SBI) will meet shortly to decide on the riders that the airline would be required to follow.The government is expected to move fast on allowing foreign direct investment into the cash- starved aviation sector, a move that would ease the pressure off Indian carriers. “Once the FDI proposal is cleared, the situation of the country’s airline majors would be
healthier” a government official told Hindustan Times on the condition of anonymity. “Banks are therefore not averse to providing the additional capital sought by Kingfisher.” A chairman of a public sector bank, which has a significant exposure to Kingfisher said that an amount of over Rs 7000 crore cannot be allowed to turn non-performing. Besides, banks would be required to provide the additional capital as part of the airline’s debt restructuring exercise carried out last fiscal. “We would naturally have strict conditions for the private carrier and banks would keep a close eye on its cash inflow,” the chairman said. SBI has an exposure of Rs 1,410 crore to the beleaguered airline, promoted by UB Group chairman Vijay Mallya. IDBI Bank, Punjab National Bank (PNB) and Bank of India (BoI) have exposures to the tune of Rs 719 crore, Rs 702 crore and Rs 552 crore respectively to Kingfisher. Private sector lender ICICI Bank also an exposure of Rs 430 crore to the airline. The consortium of banks, which held around 5% stake in the airline till December last year, now holds 23.4% in the airline, thanks to last year’s debt restructuring package under which a loan amount of about Rs 7,651 crore was converted into equity at Rs 64.5 per share.Read Full: PSU banks plan Rs 600-cr lifeline in working capital to Kingfisher Air - Hindustan Times
