Banks tell Kingfisher Airlines to bring fresh equity
The loans of Kingfisher Airlines were restructured less than a year ago after RBI agreed to give it a one-time dispensation.
By ET Bureau | Updated:
MUMBAI: Banks that have lent nearly Rs 7,000 crore to Kingfisher Airlines on Saturday asked Vijay Mallya, promoter of the cash-strapped airline, to bring in fresh investment as a pre-condition to restructure its loan.
This decision was taken at at a meeting convened in Bangalore by State Bank of India, one of the key lenders, to assess the status of loans and to take on board views of other banks.
“It appears that banks will have willy-nilly restructured the account, but this time we would impose stiff conditions,” a senior banker told ET on Sunday asking not to be named because he is not authorised to speak to the media.
The loans of Kingfisher Airlines were restructured less than a year ago after RBI agreed to give it a one-time dispensation. RBI allowed banks to categorise the loan as standard assets, which denotes an asset on which there is no default, which without the special dispensation would have to be treated as bad loan.
“The promoters have not infused any capital over the past four to five years while banks have restructured the loan,” said a banker who attended the meeting. In fact, the total value of Mallya’s shareholding in UB group companies and his stake in Formula One comes to nearly Rs 1,350 crore.
This decision was taken at at a meeting convened in Bangalore by State Bank of India, one of the key lenders, to assess the status of loans and to take on board views of other banks.
“It appears that banks will have willy-nilly restructured the account, but this time we would impose stiff conditions,” a senior banker told ET on Sunday asking not to be named because he is not authorised to speak to the media.
The loans of Kingfisher Airlines were restructured less than a year ago after RBI agreed to give it a one-time dispensation. RBI allowed banks to categorise the loan as standard assets, which denotes an asset on which there is no default, which without the special dispensation would have to be treated as bad loan.
“The promoters have not infused any capital over the past four to five years while banks have restructured the loan,” said a banker who attended the meeting. In fact, the total value of Mallya’s shareholding in UB group companies and his stake in Formula One comes to nearly Rs 1,350 crore.
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