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Mallya meets SBI top brass, seeks credit line for Kingfisher Airlines |
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Mallya meets SBI top brass, seeks credit line for Kingfisher Airlines
Business Line
Saturday, March 28, 2009 New Delhi, March 27 Kingfisher Airlines has approached State Bank of India for a credit line to meet its operational needs, sources privy to the development said.
The airline is reported to be seeking a facility in the range of Rs 1,500-3,000 crore. Sources indicate that the Kingfisher Airlines Chairman, Mr Vijay Mallya, met with the top brass of the bank in Mumbai last Tuesday where a presentation on the company?s business plans and credit requirements was made.
The bank is said to be ?favourably inclined? to disburse the loan, sources indicated, and added that though the terms of the loan were yet to be worked out, they may not be onerous.
The airline has been facing problems with various vendors over payment of outstanding dues. In January, it had to submit a bank guarantee and provide post-dated cheques to the Airports Authority of India to clear its dues.
The meeting between the bank and the airline comes in the backdrop of Kingfisher, like many others in the industry, facing mounting losses. The airline said that its performance in the current fiscal was affected by a variety of factors, including the initiation cost of international operations and the impact of exchange fluctuation in dollar denominated costs. Besides, lease rental, including payments for aircraft on the ground and interest expenses too hurt its operations, the company had said.
While Kingfisher?s latest financial position is not available, the balance sheet as of March 31, 2008, showed that its current liabilities and provisions exceeded the current assets by Rs 6.9 crore. Its accumulated losses as of March last year amounted to Rs 967.76 crore.
Between 2005-06 and 2007-08, Kingfisher reported a cumulative loss of Rs 1,219.99 crore, the Aviation Minister, Mr Praful Patel, informed Parliament in February. Kingfisher has initiated steps to cut costs by reducing capacity deployed and deferring delivery of aircraft.
Sources :: State Bank of India |
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