Kingfisher Airlines outlook dims further on loan denial - Economic Times

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Kingfisher Airlines outlook dims further on loan denial - Economic Times

NEW DELHI/MUMBAI: State Bank of India, the country's top lender, has not extended further loans to debt-crippled Kingfisher Airlines, a bank official said, denying reports that the state-owned creditor was close to offering a lifeline.

Several newspapers reported that State Bank of India (SBI) would throw a lifeline to Kingfisher, which is majority owned by liquor baron Vijay Mallya, giving figures ranging from 2.0 to 16.5 billion rupees ($40-335 million).

"We have not given any fresh loans to Kingfisher," said SBI's deputy managing director R. Venkatachalam, who is responsible for managing the Kingfisher loan account. "All media reports are baseless and untrue."

The bank is also not considering giving any fresh loans to the carrier as of now, he said late on Wednesday.

Desperately strapped for cash, Kingfisher stands on the brink of collapse after nearly a week of flight cancellations and the resignation of dozens of its pilots.

Banking sources, with direct knowledge of the situation, earlier told Reuters the airline's consortium of 16 lenders, which includes SBI, were still studying a debt-restructuring proposal put forward last week.

Banks own about a quarter of the carrier through an earlier debt-for-equity swap.

Shares in SBI ended down 8.1 percent, their biggest single-day fall in more than two-and-a-half years, on concerns it was extending more credit to the beleaguered carrier.

India's second-largest airline until this year, Kingfisher has not turned a profit since it was founded in 2005 and is carrying a debt burden of at least $1.3 billion.

Its revenue has been in decline since the end of last year. Staff are not being paid and tax bills remain outstanding. A tax official said the airline's arrears for financial year 2011/12 were around 400


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