The government has said repeatedly that it will not bailout Kingfisher Airlines. But there are reports that State Bank of India has suddenly sanctioned a 1200-crore package for Vijay Mallya's bleeding carrier. Meanwhile, the airline cancelled at least 20 flights today, most of them out of Mumbai, continuing a trend it began over the weekend. Here are 10 developments:
1) Civil Aviation Minister Ajit Singh said this morning that "it's good if banks give loans to the airline." Mr Singh was asked about whether the government-owned State Bank of India was providing an emergency exit to help Kingfisher. Mr Singh did not confirm or deny those reports. He stressed that he does not want the airline to close down, but passenger safety and convenience are the main priority. Banks have to decide on loans based on the business plan of the company. If they are satisfied with the business plan, he said, they should proceed with loans.
2) NDTV has learnt that the State Bank of India, which has the maximum exposure to the airline at 1400 crore, is reportedly ready to provide a Rs 1200-crore relief package to Kingfisher . Of this, nearly 700 crores will be provided in working capital loans. "Cannot comment due to client confidentiality," SBI Chairman Pratip Chaudhuri told NDTV.
3) SBI's package is likely to include bank guarantee and loan repayment extension, sources said.
4) The Punjab National Bank is also likely to provide a guarantee of Rs 160 to 200 crore, sources said.
5) The civil aviation minister met this morning with Bharat Bhushan, who heads the DGCA, the regulatory body for the aviation industry. Mr Bhushan briefed the minister on various aspects of the Kingfisher crisis.
6) Yesterday, Mr Bhushan met with Kingfisher CEO Sanjay Aggarwal. The airline was ordered to submit a revised schedule by today based on its flying capacity. Twenty eight of its 64 planes are grounded.
7) Mr Bhushan has also ordered a special audit to ensure that Kingfisher's financial preoccupations are not impeding upon passenger safety. He had said yesterday that though nothing suggests this, he would like a safety report to prove the airline is following all guidelines.
8) Mr Bhushan had summoned the CEO after a weekend that saw hundreds of passengers stranded because Kingfisher cancelled flights without any notice or alert to its passengers. The airline also failed to inform the DGCA of its revised schedule, which is a basic requirement.
9) Till yesterday, a consortium of 18 banks, led by SBI, that have lent to Kingfisher had refused to convert any more loans into equity. Kingfisher declared losses of Rs 444 crores in Q3 - up from 254 crores a year ago.
10) Kingfisher's current debt is close to 1.3 billion dollars or Rs. 7,057.08 crore.