SBI ultimatum to Kingfisher

New Delhi, Nov. 6: The State Bank of India, which leads the consortium of banks funding Kingfisher Airlines, today said the carrier would not be able to stay afloat if it failed to bring in fresh capital by November 30.

"The consortium of banks has done everything possible to make Kingfisher work, but the company is not working. The management has to get capital. We have given time till November 30 by which they should get capital. Otherwise they will not fly," SBI chairman Pratip Chaudhuri said.

He added that the airline would not be able to get investors if it remained grounded. Chaudhuri said the 17-bank consortium had been meeting regularly to help the cash-strapped airline.

The SBI has an exposure of over Rs 1,500 crore to Kingfisher. Chaudhuri said the consortium had lent Rs 7,000 crore to the airline.

Reacting to the December deadline set by the Directorate General of Civil Aviation (DGCA), Kingfisher today said it would submit a revival plan within the next few weeks.

If Kingfisher fails to come up with a workable plan, it may permanently lose its licence, which is due to expire on December 31.

"We are working on a comprehensive plan, which will address the interests of all stakeholders and this will be submitted to the DGCA," a spokesperson for the airline said.

The DGCA had suspended the Vijay Mallya-owned airline's licence last month following a lockout declared by the carrier. The regulator had pointed out to Kingfisher's failure to run safe, efficient and reliable operations.

According to airline officials, Kingfisher is thrashing out a plan to arrange funds needed to bring the airline back on track. Sources said the carrier was in talks with a number of foreign financiers.

"We will provide DGCA with all the financial details, which would prove that we can run the airline again. We are well aware of the deadline and are working accordingly," a senior Kingfisher official said.

The DGCA said it would hold talks with airport operators, oil companies and other agencies to which Kingfisher owes money before allowing it to fly.

According to civil aviation ministry officials, any objection from even one of the agencies can result in the cancellation of the licence.

They added that the airline needed funds to not only run its aircraft, but also pay salaries to employees and clear dues to various oil PSUs and the Airports Authority of India.

Kingfisher has been saddled with a loss of Rs 8,000 crore and a debt burden of over Rs 7,524 crore, a large part of which it has not serviced.

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