The next meeting will be held in Mumbai soon where lenders are likely to push for better commitment from the Vijay Mallya-owned Kingfisher Airlines
New Delhi: Lenders of Kingfisher Airlines will soon decide on future course of action with regard to the grounded carrier as they do not want the company to close down, reports PTI quoting top official from State Bank of India (SBI).
"The representatives met in Bangalore ... the plan for action the consortium is deciding. We don't want to put a lock on the company's office," Pratip Chaudhuri, chairman of SBI, lead lender to Kingfisher, said.
Last week, the meeting between lenders and the Kingfisher management remained inconclusive as bankers were "not impressed" with the revival plan, sources said.
The next meeting will be held in Mumbai soon where lenders are likely to push for better commitment from Kingfisher Airlines (KFA), sources added.
The 17-bank consortium has extended Rs7,000 crore loans to Kingfisher. SBI alone has an exposure of Rs1,500 crore, which has not been serviced since January, 2012.
As per the revival plan submitted to Directorate General of Civil Aviation (DGCA) last month, Kingfisher had said it would require about Rs652 crore over the next 12 months for running its operations. These funds would come from the UB Group's resources as banks were unwilling to fund the cash-strapped airline.
Of the Rs652 crore that the airline would need to restart operations, Rs120 crore would be needed to meet salary arrears for its employees.
Kingfisher Airlines CEO is understood to have informed DGCA that the salary dues would be cleared by giving two months' wages and back wages each month from the next month onwards.
In addition, funds would be required to refurbish the aircraft, including their engines. The airline's pilots would also have to undergo refresher training and medical tests before they can start operating flights again.
Kingfisher officials claimed that there were no dues against oil companies, barring interest payments due to HPCL.
The airline would have to meet the dues it owe to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs250 crore.
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