Lenders to the debt ridden Kingfisher Airlines on Tuesday decided to start the recovery process for R7500-crore loans given to the grounded airline after it failed to come up with a feasible plan to restart operations.
"We have decided to recall (initiating the recovery process)
the loans given to Kingfisher Airlines. However, each bank board will decide the future course of action," said Shyamal Achaya, deputy managing director, State Bank of India (SBI) told reporters here after a two-hour meeting of bankers with company representatives.
The meeting was attended by five bankers, led by SBI, and the airline's management, including chief executive officer Sanjay Agarwal and UB Group President and CFO Ravi Nedungadi.
"No progress has been made so far by the airline management to restart operations, and the bankers feel that enough time has been given to the company," Acharya said.
The exposure of banks to the troubled carrier runs into R6,360 crore. Unpaid interest and compounded interest take it to over Rs. 7,500 crore.
SBI, the leader of the consortium of lenders, has the maximum exposure with Rs, 1,600 crore, followed by Punjab National Bank with Rs. 800 crore, IDBI Bank Rs. 800 crore, Bank of India Rs. 650 crore and Bank of Baroda Rs. 550 crore.
Kingfisher has been grounded since October last following labour unrest due to non-payment of salaries.
The airline is sitting on a debt of over Rs. 7,500 crore in banks loans, and over Rs. 10,000 crore in accumulated losses and unpaid salaries, taxes, and vendor dues.