Money » Lenders Prepare For Final Call After Meeting With Vijay Mallya
Lenders prepare for final call after meeting with Vijay Mallya
Dailybhaskar | Nov 30, 2012, 17:40PM IST
New Delhi: The consortium of lenders to Kingfisher Airlines headed by SBI (State Bank of India), have jointly decided that the final call on their policy to recover the debt from them, will be taken once they meet the chairman, Vijay Mallya. Kingfisher on their part havent given details about their schedule but the meeting with Mallya may not be very far off, before radical steps are taken. It has been months since most of the debts to Kingfisher have turned virtually into bad debts, and the lenders are trying every way possible to recover their investments in the ailing airliner. The sum totals to around Rs 8000 crore in all.
According to Moneycontrol, one of the top officials from the group of lenders said, "We are banking on the proposed meeting with Dr. Mallya, who has been assuring us on overseas investments in the company. If he fails to deliver anything concrete in the meeting, we will take our final call to close the chapter. For banks, his presence is most important in the discussion. We cannot afford to bear rising burden of the debt any more." Very recently, Vijay Mallya is known to have recovered a sizeable amount of cash from his stake sale of his liquor company United Spirits to UK based Diageo, for around Rs 3,500 crore. But whether this amount will be flowing to Kingfisher to pay for debts, has always been doubtful but the lenders are hoping that some part of it will be utilised to ease the debt levels with Kingfisher.
There was also a debate whether liquidity is an option. If the lenders decide to liquidate the company, only debts are what they will have from Kingfisher, and also since the shares have plunged a lot in price since the the time of their pledge as securities, the sale wouldnt yield any returns either. From Rs 64 to Rs 13, to be exact. Also the aircrafts weere majorly on lease aggreements, hence only 5 to 6 of them remain with Kingfisher now. So taking the scenario in consideration, there just might a final call soon but only after Mallya decided to meet the creditors.