Shares of cash strapped Kingfisher Airlines on Friday sank by 18% before stabilising to close 3.6% down following concerns that it is finding it difficult to raise funds. The airline's share price touched Rs 20.5 before stabilising to close at Rs 24.1.
When asked whether the meeting between Kingfisher Airlines officials and bankers was inconclusive, an official close to the development told HT, "You are talking about millions. Such a deal takes time (it) cannot be done in one day."
Reuters had on Friday reported that the airline was in talks with an Indian investor, but would not give details.
The petroleum ministry said on Friday that it would not extend any extra credit facility to Kingfisher Airlines from state-owned oil marketing companies for fuel.
"How can we offer more credit? It already has nearly Rs 500 crore of pending bills," a top oil ministry official said on condition of anonymity.
"Moreover, Kingfisher cannot offer any guarantee of payment so oil companies cannot go beyond a limit," he said.
When asked to compare with Air India’s situation, the official said: "Air India has government guarantee. No one is ready to give guarantee to Kingfisher. The airline has already defaulted on payments and it was put on cash and carry model."