The beleaguered airline, which had debt of $1.4 billion at the end of March, has faced staff agitation over non-payment of salaries and is under pressure from lenders to come up with a turnaround plan.
On Thursday, bankers participating in a meeting of 17 lenders to the airline in Mumbai asked the Kingfisher management to pay fees on the guarantees and letter of credit which is due for renewal. They also asked the management to come up with a concrete plan on settling dues.
The management, represented by CEO Sanjay Aggarwal and UB Group Chief Financial Officer Ravi Nedungadi, told the banks that they would not be able to pay any money immediately. Talks are on with private and foreign players to secure equity funding, they added.
Kingfisher has shut most of its operations after a severe cash squeeze left it with little money to pay for fuel, aircraft leases and salaries. It has fewer than 20 aircraft at its disposal.
It has borrowed more than Rs 7,500 crore and failed to pay on time. Most banks have classified the account as a sub-standard loan, which is a loan on which the borrower has defaulted. The banks are unwilling to give more money since the account is already classified as a bad loan and fresh lending will be viewed as window dressing - an attempt to cover stress assets.
(Source- http://economictimes.indiatimes.com)
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