The consortium of 17 banks that have funded debt-laden Kingfisher Airlines Ltd (KFA) will meet in Bangalore on Thursday. The meeting assumes significance, as this would be the first one after the Government revised foreign direct investment norms in aviation and allowed foreign carriers to pick up to 49% stake in domestic scheduled airlines. There are indications that Kingfisher promoter, Vijay Mallya, will make a presentation to the bankers’ on the turnaround strategy for the ailing private carrier. Banks are hoping that Mallya would come up with proposals that would lead to equity infusion into the airline.
Banks have total exposure of nearly Rs.7000 to the airlines and the SBI has exposure of nearly Rs.1500 crore. The loans have turned bad (NPA) during january itself.
The RBI has disallowed the banks to use Kingfisher brand name as security. Hence the exposure has turned unsecured and banks are required to make 25% provision on the same.
Earlier the banks have also expressed displeasure due to absence of Mr. Mallya during the consortium meeting although advance intimation was available.
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