No take off: Kingfisher airline gets its wings clipped
A CONSORTIUM of 16 Indian banks has refused any fresh loans to cash-strapped airline Kingfisher, a report by a leading business daily said today.Kingfisher has scrapped scores of flights, leaving passengers stranded and company chief Vijay Mallya, a brewing magnate known as the “King of Good Times”, battling to save the struggling firm.The Business Standard said the consortium of 16 public and private sector banks, led by state-run State Bank of India, had refused to give new loans to the carrier, whose troubles have been fuelled by debt-funded expansion.The business daily quoted State Bank of India chairman Pratip Chaudhuri as saying the bank “has not given any fresh loans to Kingfisher. It is widely known that it is a sub-standard asset.’Only 28 of Kingfisher’s fleet of 64 registered aircraft are operating as many of its planes have been reclaimed by lessors or are awaiting spare parts.The Business Standard quoted the head of an unnamed public sector bank with loans to Kingfisher as saying: “Given the present state of the airline, it is not prudent to give any fresh loan.”SBI’s shares were up by nearly 1.5 per cent by midday after plunging by nearly eight per cent yesterday on concerns about its existing loan exposure to Kingfisher and a report it would lend more to the company.The Bangalore-based airline, India’s second-largest carrier until earlier this year when its cash woes deepened, has blamed its latest problems on officials freezing its bank accounts for not paying tax arrears.Kingfisher’s net loss widened to 4.44 billion rupees ($88m/£56.01m) in the three months to December.Mallya has said closing down the firm “is not an option”.Kingfisher is one of India’s worst-hit airlines in an industry plagued by high fuel prices, price wars and poor airport infrastructure.
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