Kingfisher bail out likely, two ministers say airline should not fail - NDTV

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Kingfisher bail out likely, two ministers say airline should not fail - NDTV

The government has said repeatedly that it would not bailout Kingfisher Airlines.  But there are reports that State Bank of India has suddenly sanctioned a Rs 1,200-crore package for Vijay Mallya’s bleeding carrier. Meanwhile, the airline cancelled at least 20 flights today, most of them out of Mumbai, continuing a trend it began over the weekend.

 

Here are 10 developments:

 

1)      Civil Aviation Minister Ajit Singh said this morning that “it’s good if banks give loans to the airline.” Mr Singh was asked about whether the government-owned State Bank of India was providing an emergency exit to help Kingfisher.  Mr Singh did not confirm or deny those reports. He stressed that he does not want the airline to close down, but passenger safety and convenience are the main priority. Banks have to decide on loans based on the business plan of the company. If they are satisfied with the business plan, he said, they should proceed with loans.

 

2)      NDTV has learnt that the State Bank of India, which has the maximum exposure to the airline at Rs 1,400 crore, is reportedly ready to provide a Rs 1,200 crore relief package to Kingfisher. Of this, nearly Rs 700 crore will be provided in working capital loans. “Cannot comment due to client confidentiality,” SBI Chairman Pratip Chaudhuri told NDTV.

 

3)      SBI’s package is likely to include bank guarantee and loan repayment extension, sources said.

 

4)       The Punjab National Bank is also likely to provide a guarantee of Rs 160 to 200 crore, sources said. However, Reuters reports that a consortium of lenders to Kingfisher Airlines has not yet agreed to extend further loans to the beleaguered carrier. Senior executives of Punjab National Bank, IDBI Bank and Bank Of


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