Difficult to extend more funds to Kingfisher: SBI
18 January 2012
State Bank of India yesterday said it would be difficult for lenders to provide more funds to debt- ridden Kingfisher Airlines unless the airline made a payment of Rs100 crore to restore a bank guarantee ithat were invoked following the carrier's failure to repay its loans or make good the default.
"It (Kingfisher Airlines) is right now an NPA (non-performing asset). In Q3, it was sub-standard. Until such time the default is cleared, banks are finding it difficult to lend more. If Kingfisher becomes an NPA, we don't have a choice. Neither does the company," SBI Chairman Pratip Chaudhuri told reporters.
SBI, the lead bank in the consortium of lenders that extended funds to Kingfisher Airlines, has loan exposure of Rs1,457.78 crore to the struggling firm. This exposure is the highest among any of the lenders to the airline, followed by IDBI Bank (Rs727.63 crore), Punjab National Bank (Rs 710.33 crore), Bank of India (Rs575.27 crore) and Bank of Baroda (Rs537.51 crore).
The private carrier is awash in red, struggling to service its loans, running up to over Rs6,000 crore. Chaudhuri added that the Vijay Mallya-led airline had time till 20 December to make good its loan repayment defaults or restore the guarantees, but had done neither and therefore continued to be classified as an NPA.
"There are some guarantees, they got invoked on September 20. The company had time till December 20 to either pay the guarantees or restore them. They have done neither, so it continues to be an NPA. The default is about Rs 100 crore, if they secure the default, if they pay up the cash then it will become a standard loan. If the account becomes a sub-standard NPA, then it becomes difficult for banks," he said.
The airline reported a net loss of Rs469 crore for the July-September quarter of the current fiscal, though its revenues increased 10.2 per cent to Rs1,528 crore. In the last fiscal ended 31March, 2011, it was running a loss of over Rs 1,000 crore.