The State Bank of India (SBI), the biggest lender to Vijay Mallya-led air carrier Kingfisher Airlines, has classified its loans to the loss-making carrier as non-performing asset (NPA).
"Kingfisher is NPA for us. They are in default," SBI chairman Pratip Chaudhuri said today.
A consortium of banks led by SBI has lent funds to Kingfisher Airlines and SBI has an exposure of Rs1,457.78 crore to the struggling airline. Among other lenders to Kingfisher Airlines, IDBI Bank has the next highest exposure of Rs727.63 crore, followed by Punjab National Bank Rs710.33 crore, Bank of India Rs575.27 crore and Bank of Baroda Rs537.51 crore.
Kingfisher Airlines, which has amassed total debts of over Rs6,000 crore, is struggling to service its loans.
Kingfisher reported a net loss of Rs469 crore for the July-September quarter of the current fiscal, though its revenues rose by 10.2 per cent to Rs1,528 crore.
In the last fiscal ended 31 March 2011, the airline reported a net loss of over Rs1,000 crore.
Kingfisher had, last year, announced various business rationalisation initiatives, including phasing out of its low-cost Kingfisher Red service and reconfiguration of its fleet.
However, the airline, which has been under pressure of its huge liabilities, could not pursue these measures to their logical conclusion. Kingfisher was also in talks with its lenders and some potential investors to restructure loans and for fresh cash infusion.