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Kingfisher can't be revived without fresh equity: SBI
The SBI chief further said the promoters should not reduce the number of flights.
New Delhi: SBI on Friday said plans to revive Kingfisher Airlines will not work unless they are backed by fresh equity infusion. "Firm plan should be to bring equity... whatever plans they make (to revive the airline), plans have no meaning till equity comes," SBI Chairman Pratip Chaudhuri said in an interview to Zee Business.
Pointing out that the airline again suffered losses in the March quarter to the tune of Rs 1,000 crore, he said, "the more it gets burdened with losses, the more difficult will be the recovery."
The SBI chief further said the promoters should not reduce the number of flights as it would erode the confidence of passengers and travel agents.
"They should keep the airlines running and show some courage", he said, adding the bank has confidence in the management of the airlines which is led by Vijay Mallya.
Beleaguered Kingfisher yesterday said it plans to sell two of its unused properties in Mumbai and Goa to partly repay staggering loans totalling about Rs 7,500 crore. The lenders have been demanding at least Rs 1,000 crore in fresh capital by promoters as a pre-condition for considering the airline's request for working capital loans of around Rs 2,000 crore. This was a pre-condition that lenders insisted at the previous meeting in March.
Out of the total loans, SBI alone has an exposure of over Rs 1,400 crore, followed by PNB (Rs 700 crore), Bank of Baroda (around Rs 500 crore). Private lender ICICI Bank, which had Rs 430 crore exposure, earlier this week sold its debt to a hedge fund run by Srei Infra.
On whether SBI like ICICI Bank was looking to sell its debt in the airlines, Chaudhuri said "no, we are not thinking on those lines. We still have faith in the management". The SBI, he added, never presses "panic button" quickly if a company is not doing well.
The bank will work with the company till last to help it revive, he said, adding "only when management raises its hand and says nothing could be done, SBI takes action to recover dues."
He said that of the three carriers -- Kingfisher, Air India and Jet Airways -- in which the bank has exposure, Jet Airways was number one in terms of operations, though it was also passing through challenging times.
Chaudhuri also suggested that Air India should end the uncertainty over its international flights. He further said that it was in the interests of both, the Air India management and pilots to resolve their pending issues at the earliest and ensure that the national carrier emerges as a "dependable airline".